Refinancing and home equity activity rose, but mortgage delinquencies ticked higher in Q3, according to TransUnion
The United States mortgage market showed signs of renewed activity in the third quarter, with originations climbing 8.8% year-over-year, according to TransUnion’s latest Credit Industry Insights Report.
The uptick was driven by a surge in rate-and-term refinances—up 101% from a year ago—and a 23% jump in cash-out refinances, as moderating interest rates and improving affordability conditions enticed more borrowers back into the market.
“Mortgage activity is showing signs of recovery, supported by improving affordability conditions,” Satyan Merchant, senior vice president and mortgage business leader at TransUnion, said.
“We remain closely attuned to the potential for further rate reductions should the Federal Reserve proceed with additional cuts. At the same time, rising delinquency rates—particularly within certain borrower segments—underscore the importance of maintaining a vigilant and proactive approach to risk monitoring and portfolio management.”
The data revealed that the average loan amount for new mortgages reached $371,467 in Q2 2025, up from $347,692 a year earlier.
Total mortgage balances across all consumers climbed to $12.7 trillion, a $400 billion increase over the same period. However, the consumer-level delinquency rate (60+ days past due) rose to 1.36%, compared to 1.24% in Q3 2024.
FHA loans continued to account for the largest share of delinquencies, but VA loans saw the sharpest increase, up 35% year-over-year.
Gen Z borrowers emerged as a notable force in the home equity space, with home equity line of credit (HELOC) and home equity loan (HELOAN) originations up 28% and 23% respectively for this cohort.
While Gen X and baby boomers still dominate overall home equity activity, the rapid growth among younger borrowers signals a shifting demographic in homeownership and wealth-building strategies.
Broader credit trends from the report highlighted a growing divergence in consumer credit risk, with more Americans moving into either super prime or subprime tiers. This polarization was evident across credit cards and auto loans, where both ends of the risk spectrum saw the strongest growth in originations and balances.
Unsecured personal loans also hit record balances, led by fintech lenders and resilient credit performance even among higher-risk borrowers.
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