TransUnion Forecast Predicts Mortgage & Consumer Lending Market to Fully Recover by End of 2016.
TransUnion’s 2016 mortgage and credit card forecasts predict that the consumer lending market will have fully recovered by the end of 2016 from both the mortgage crisis and the ensuing Great Recession that concluded more than six years ago. Both the mortgage and credit card markets are performing extremely well, with increased consumer participation and continued low delinquency rates.
TransUnion forecasts the national serious mortgage delinquency rate (the ratio of borrowers who owe three or more payments) will decline from 2.50% at the end of 2015 to 2.06% at the conclusion of 2016, which ends up in line with the historical norm.
Consumer-level mortgage delinquency rates peaked in Q1 2010 at 6.94% and have been declining nearly every quarter since. Importantly, balances are growing, a sign that new loan originations from home purchase activity are outpacing the normal pay-down velocity of existing loans. This reflects increasing consumer confidence in the housing market and consequent purchase activity.
The credit card serious delinquency rate (the ratio of bankcard borrowers who owe four or more payments) is forecast to conclude 2016 at 1.46%. This would mark the fourth consecutive year of delinquency rates just below 1.50%, a nearly 50% decline in delinquency from the end of 2009 and well below historic norms—signs of a healthy market.