CHICAGO—Mortgage lending activity gained traction in the second quarter of 2025, lifted by improving affordability and easing interest rates, while younger borrowers continued carving out a growing presence in the home-equity market, according to TransUnion’s latest Credit Industry Insights Report.
Mortgage originations increased 8.8% year-over-year in Q2 2025, driven largely by refinancing activity. Rate-and-term refinances surged 101% from the prior year, and cash-out refinances rose 23%, reflecting homeowner response to shifting rate conditions.
Delinquency rates ticked higher, however. The consumer-level 60-plus-days past-due rate climbed to 1.36% in Q3 2025, up from 1.24% a year earlier. FHA loans continued to represent the largest share of late payments, while VA loans posted the steepest year-over-year increase in delinquencies, rising 35%.
Home-equity lending remained a bright spot, marking its fifth straight quarter of growth. The segment rose 14% year-over-year in Q2 2025. While Baby Boomers and Gen X still dominate home-equity originations, Gen Z showed the fastest expansion, with HELOC and HELOAN activity up 28% and 23%, respectively.
“The housing finance landscape continues to evolve, shaped by shifting demographics and an increasingly dynamic monetary policy environment,” said Satyan Merchant, senior vice president, automotive and mortgage business leader at TransUnion. “As interest rates begin to ease, mortgage activity is showing signs of recovery, supported by improving affordability conditions. 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.”