Findings from the newly released Q2 2024 Quarterly Credit Industry
Insights Report (CIIR) from TransUnion (NYSE: TRU) reveal that as
consumers continue to await interest rate relief in the form of
rate cuts, credit products continue to serve to bridge the
financial gaps that may exist in many household budgets.
The report reveals that in this challenging current
macroeconomic environment, consumers are continuing to engage in
the credit market, taking on more balances and credit products. And
while prime and below consumers are seeing lower year-over-year
(YoY) new originations across many products, though not all, they
continue to use their available credit to get by each month as
evidenced by YoY growth in credit card balances and
utilization.
“Consumers across the board continue to engage with a wide range
of credit products, with continued balance growth across credit
risk tiers. Lower risk super prime, in particular, originated more
this quarter in areas such as credit cards and auto,” said Michele
Raneri, vice president and head of U.S. research and consulting at
TransUnion. “Of course, on the origination front, this doesn’t mean
prime and below consumers don’t also have access to new credit in
these areas. However, they are going to have to wait for lower
interest rates and for their monthly payments to come down.”
Key findings include:
- Unsecured personal loan balance growth
continued in Q2 2024, albeit at a more moderated pace. While it was
the seventh consecutive quarter of balance growth, YoY growth was
only 6%, down from the double-digit growth seen at its peak.
Originations saw YoY growth for the first time in five quarters in
Q1 2024 (the most recent quarter for which originations data are
available). Growth was led by super prime and near prime, at 12%
and 10% YoY growth respectively, and all risk tiers except prime
plus seeing growth.
- Bank card balances grew 4.8% YoY led by
subprime at 12.3% growth. All risk tiers saw growth YoY. Card
originations were down 7% YoY in Q1 2024. However, super prime saw
growth YoY.
- It’s a similar story with auto, with
originations down YoY in Q1 2024, with the exception of super
prime. Among the super prime risk tier, originations were up 10.3%
YoY in Q1 2024. Balances grew 2.7% YoY, primarily behind growth
among the subprime (9.8%) and super prime (7.9%) risk tiers.
- Mortgage originations saw YoY growth in Q1
2024, which represents the first YoY growth since 2021. The growth
was headlined by growth on both ends of the credit risk spectrum,
with subprime up 15.7% YoY and super prime up 12.1% over that
time.
Raneri added, “It remains to be seen how these numbers will
change if and when the Fed lowers interest rates later this year.
For consumers, the best thing that they can do is ensure that their
credit is in the best position possible when that time comes in
hopes of being able to take advantage of those lower rates.”
To learn more about the latest consumer credit trends, register
for the Q2 2024 Quarterly Credit Industry Insights Report
webinar. Read on for more specific insights about credit cards,
personal loans, auto loans and mortgages.
Balances and accounts rise YoY as consumers continue to
turn to cards
Q2 2024 CIIR Credit Card Summary
The total number of credit cards topped 545 million in Q2 2024
as consumers continued to turn to cards to help manage in this
challenging economic environment. Similarly, balances continued to
grow (up 8.6% YoY) albeit at a lower rate than previously. This
follows a period of consistent double-digit YoY percentage
increases. Total balances remained above one trillion for the third
consecutive quarter, at $1.05 trillion. Borrower-level
delinquencies measured as 90 or more days past due (90+ DPD)
increased by 20bps YoY to 2.26%; however, the YoY increase between
2023 and 2024 was significantly less than the 49bps YoY increase
between 2022 and 2023. Bankcard originations declined 7% YoY,
marking the fourth consecutive quarter of YoY declines.
Generationally, 19% of all originations were attributed to Gen Z,
up 2% YoY, and the only generation that saw a YoY increase in
share.
Instant Analysis
“A more pronounced divergence appears to be occurring when it
comes to how different consumer segments are faring in this
economic environment, and in particular, how they are using their
credit cards. Higher-risk prime and below segments seem to be
experiencing more significant inflationary pressures and as such,
relying on their cards more, evident in increasing balances and
higher utilization. Originations will likely continue to decline
for mid-tier and worse consumers as issuers look to less risky
borrowers. We expect delinquency rates to continue to rise, though
the growth rate should decelerate.”
- Paul Siegfried, senior vice president
and credit card business leader at TransUnion
Q2 2024 Credit Card Trends
Credit Card Lending Metric (Bankcard) |
Q2 2024 |
Q2 2023 |
Q2 2022 |
Q2 2021 |
Number of Credit Cards (Bankcards) |
545.1 million |
530.6 million |
500.0 million |
463.4 million |
Borrower-Level Delinquency Rate (90+ DPD) |
2.26% |
2.06% |
1.57% |
0.95% |
Total Credit Card Balances |
$1.05 Trillion |
$963 billion |
$820 billion |
$707 billion |
Average Debt Per Borrower |
$6,329 |
$5,947 |
$5,270 |
$4,828 |
Number of Consumers Carrying a Balance |
170.1 million |
167.2 million |
161.6 million |
152.9 million |
Prior Quarter Originations* |
17.7 million |
19.0 million |
18.9 million |
14.8 million |
Average New Account Credit Lines* |
$6,204 |
$5,972 |
$5,035 |
$3,974 |
*Note: Originations are viewed one quarter in arrears to account
for reporting lag.Click here for a Q2 2024 credit card
infographic.For more credit card industry information, click here
for episodes of Extra Credit: A Card and Banking Podcast by
TransUnion.
Rise in originations helps unsecured personal loans to
new record balance
Q2 2024 CIIR Unsecured Personal Loan
Summary
After five consecutive quarters of YoY originations declines,
unsecured personal loan originations were up 7% YoY in Q1 2024 to
4.6 million. Almost all risk tiers, except for prime plus,
contributed to the growth in originations, led by super prime and
near prime. Q2 2024 represented the 12th consecutive quarter of YoY
growth in total balances. However, for the 7th consecutive quarter,
that YoY balance growth was at a slower rate than the quarter
before, with growth of 6% to $246 billion. Total new account
balance for Q1 2024 fell 10% YoY to $27 billion, while the average
balance per consumer saw a small growth of 1.2% YoY in Q2 2024.
Total number of consumers with a balance grew YoY for the 11th
consecutive quarter, reaching 23.9 million. Consumer-level 60+ DPD
delinquencies fell to 3.4% in Q2 2024. This was led by subprime,
which saw a decline of nearly 7% YoY in Q2 2024.
Instant Analysis
“Super prime lending largely fueled the new record in balances
and contributed to the first YoY quarter of origination growth in
five quarters, although total new account balances were lower in
aggregate. Delinquency numbers continued to improve for the second
consecutive quarter, driven by lower subprime borrower
delinquencies. We are seeing FinTech activity in the unsecured
personal loans market returning to levels seen in previous years.
It will be worth watching to see if FinTechs, and other lenders,
are positioning themselves to take advantage of likely Federal
Reserve rate cuts later in 2024.”
- Liz Pagel, senior vice president of consumer
lending at TransUnion
Q2 2024 Unsecured Personal Loan
Trends
Personal Loan Metric |
Q2 2024 |
Q2 2023 |
Q2 2022 |
Q2 2021 |
Total Balances |
$246 billion |
$232 billion |
$192 billion |
$146 billion |
Number of Unsecured Personal Loans |
28.8 million |
27.2 million |
24.9 million |
20.7 million |
Number of Consumers with Unsecured Personal
Loans |
23.9 million |
22.7 million |
21.0 million |
18.7 million |
Borrower-Level Delinquency Rate (60+ DPD) |
3.38% |
3.62% |
3.37% |
2.28% |
Average Debt Per Borrower |
$11,687 |
$11,548 |
$10,344 |
$9,079 |
Average Account Balance |
$8,557 |
$8,558 |
$7,705 |
$7,072 |
Prior Quarter Originations* |
4.6 million |
4.3 million |
5.0 million |
3.2 million |
*Note: Originations are viewed one quarter in arrears to account
for reporting lag.Click here for additional unsecured personal loan
industry metrics. Click here for a Q2 2024 unsecured personal loan
infographic.
Mortgage originations up YoY for the first time since
2021
Q2 2024 CIIR Mortgage Loan Summary
Q1 2024 origination volumes increased by 2% YoY to 915K. This
represents the first YoY increase in originations since 2021.
Generationally, Gen Z saw an increase in share of mortgage
originations, up from 12.4% in Q1 2023 to 14.9% in Q1 2024, the
only generation to see a share increase over the period. Purchase
originations fell 1% YoY, although did account for 84% of all
originations in Q1 2024. Delinquencies continued to trend upward,
with consumer level 60+ DPD delinquencies up to 1.12% in Q2 2024,
up from 0.89% in Q2 2023. FHA loans maintained the majority share
of delinquent accounts. The Q2 2023 vintage is underperforming
earlier vintages at 12 months after origination. Home equity
originations were down 4% YoY to 472K in Q1 2024. HELOC
originations fell 7% YoY to 234K in Q1 2024, which marked the fifth
consecutive quarter of YoY declines. HELOAN originations fell 1%
YoY top 237K in Q1 2024.
Instant Analysis
“After reaching two decade highs in 2023, mortgage rates have
moderated slightly over the first half of 2024, a likely factor in
the modest originations gains referenced above. With a contracting
monetary policy anticipated in the second half of 2024 due to
easing inflationary pressure, mortgage rates are expected to
decline further by the end of the year, which could further
stimulate the mortgage market. Delinquencies continued to trend up
in Q2, marking the ninth consecutive quarter of annual increases –
and is a trend to continue to monitor in the coming quarters.”
- Satyan Merchant, senior vice president, automotive and
mortgage business leader at TransUnion
Q2 2024 Mortgage Trends
Mortgage Lending Metric |
Q2 2024 |
Q2 2023 |
Q2 2022 |
Q2 2021 |
Number of Mortgage Loans |
53.4 million |
52.5 million |
51.8 million |
51.1 million |
Consumer-Level Delinquency Rate (60+ DPD) |
1.12% |
0.89% |
0.77% |
0.70% |
Prior Quarter Originations* |
915K |
899K |
2.2 million |
3.9 million |
Average Loan Amountsof New Mortgage
Loans* |
$339,232 |
$326,214 |
$322,631 |
$297,534 |
Average Balance per Consumer |
$261,389 |
$253,838 |
$246,091 |
$229,534 |
Total Balances of All Mortgage Loans |
$12.2 trillion |
$11.7 trillion |
$11.2 trillion |
$10.3 trillion |
* Originations are viewed one quarter in arrears to account
for reporting lag.Click here for additional unsecured personal loan
industry metrics. Click here for a Q2 2024 mortgage industry
infographic.
Average monthly auto payments down slightly YoY while
delinquencies tick up
Q2 2024 CIIR Auto Loan Summary
Originations for Q1 2024 were at 6 million, which was down 0.4%
YoY. Originations were down across all risk tiers with the
exception of super prime, which was up 10.3% YoY. The new/used
vehicle origination distribution continues to trend toward
pre-pandemic ratios, with 40% of vehicles financed new as opposed
to 60% used in Q1 2024. This compares to 41% new and 59% used in
pre-pandemic Q1 2019. Total auto finance balances stood at $1.6
trillion in Q2 2024, up 2.7% YoY. The average amount financed in Q2
2024 was down 3.7% for used vehicles, although the amount remained
flat for new. Average monthly payments were down slightly for both
new (-0.5%) and used (-1.5%) YoY, likely due in large part to
vehicle price stabilization. 60+ DPD consumer-level delinquency was
up slightly YoY to 1.4%. New vintages from 2023 continued to show
consistent performance when compared to the pre-pandemic periods of
2018/2019 while 2023 used vintages were slightly improved compared
to the 2022 cohort, but remained worse than 2018/2019 vintages.
Instant Analysis
“While originations remained down YoY, the fact that they were
up significantly among super prime is a sign that increased
inventories and price declines have gotten lower-risk borrowers off
the sidelines and into the market. Subprime continued to see the
most significant challenges, likely due to affordability concerns,
with originations down 27.4% from Q1 2019 levels. Price
stabilization has led to monthly payments remaining relatively flat
YoY. Higher delinquencies are worth watching, and they are
impacting loan availability at this time. Potential for rate
declines, coupled with more normal inventory levels and reduced
prices could provide relief to consumers in this market.”
- Satyan Merchant, senior vice president, automotive and
mortgage business leader at TransUnion
Q2 2024 Auto Loan Trends
Auto Lending Metric |
Q2 2024 |
Q2 2023 |
Q2 2022 |
Q2 2021 |
Total Auto Loan Accounts |
80.2 million |
80.2 million |
80.4 million |
82.1 million |
Prior Quarter Originations1 |
6.0 million |
6.0 million |
6.7 million |
7.3 million |
Average Monthly Payment NEW2 |
$740 |
$743 |
$680 |
$597 |
Average Monthly Payment
USED2 |
$527 |
$535 |
$521 |
$448 |
Average Balance per Consumer |
$24,199 |
$23,501 |
$22,178 |
$20,548 |
Average Amount Financed on New Auto
Loans2 |
$41,324 |
$41,290 |
$41,094 |
$36,634 |
Average Amount Financed on Used Auto
Loans2 |
$25,995 |
$26,983 |
$28,481 |
$24,272 |
Consumer-Level Delinquency Rate (60+ DPD) |
1.4% |
1.3% |
1.1% |
0.7% |
1Note: Originations are viewed one quarter in arrears to account
for reporting lag.2Data from S&P Global
MobilityAutoCreditInsight, Q2 2024 data only for months of April
& May.Click here for a Q2 2024 auto industry infographic.
For more information about the report, please register for
the Q2 2024 Credit Industry Insight Report webinar.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with
over 13,000 associates operating in more than 30 countries. We make
trust possible by ensuring each person is reliably represented in
the marketplace. We do this with a Tru™ picture of each person: an
actionable view of consumers, stewarded with care. Through our
acquisitions and technology investments we have developed
innovative solutions that extend beyond our strong foundation in
core credit into areas such as marketing, fraud, risk and advanced
analytics. As a result, consumers and businesses can transact with
confidence and achieve great things. We call this Information for
Good® — and it leads to economic opportunity, great experiences and
personal empowerment for millions of people around the world.
http://www.transunion.com/business
Contact |
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TransUnion |
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E-mail |
dblumberg@transunion.com |
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