CHICAGO–Even with recent data suggesting interest rate cuts are less likely this year, new account originations across several credit products are still expected to grow in 2025, according to a new report from TransUnion.
The company’s Q4 2024 Quarterly Credit Industry Insights Report (CIIR) said in its analysis that despite “multiple years of depressed origination growth, largely driven by stubbornly high inflation, rising interest rates and elevated home and vehicle prices, new auto, mortgage, and unsecured personal loans are expected to see gains in 2025. A myriad of factors, not the least of which is lenders’ continued caution in their underwriting strategies, will likely temper the overall rate of growth across these products.”
More specifically, TransUnion said:
Auto Loans
“One key driver of the forecasted growth in auto originations is new light vehicle sales, which have been forecasted to grow 2.8% in 2025,” the company said. “However, forecasted growth may be tempered as industry and consumers navigate potential policy shifts introduced by the new administration. In addition, relatively high interest rates, inflation remaining above 2%, and a still recovering used vehicle supply may also mitigate auto originations growth.”
Mortgage Originations
Mortgage originations are forecast to increase from approximately 4.6 million in 2024 to approximately 5.7 million in 2025, with most of those being purchase originations (~3.8 million), according to TransUnion.
Unsecured Personal Loans
“Unsecured personal loan lenders are expected to continue expanding lending to riskier tiers in 2025 as the macro economy continues to moderate,” TransUnion stated. “Originations are expected to increase to approximately 20.8 million over the year.”
Consumer Products
TransUnion’s Q4 2024 Credit Industry Insights Report sees continued signs of stabilization across consumer credit products.
‘Stable Consumers’
“A number of the signs of a more stable consumer credit environment that emerged in Q3 2024 have continued over the past quarter across the credit spectrum,” TransUnion said. “Originations saw some measure of YoY growth in the most recent quarter for which data are available for auto, mortgage, and unsecured personal loans. In credit cards, originations saw a smaller YoY decline than in recent quarters. Delinquencies ticked down across some credit products, although others saw increases. Balances saw increases that were more in line with rates seen prior to 2020 than in the years since.”
