Originations, Refinances, Home Equity Loans All See Gains

Mortgage originations rose 5.1% year-over-year in Q1 2025, despite high home prices and ongoing pressure from elevated interest rates, according to TransUnion’s quarterly Credit Industry Insights Report (CIIR) for Q2 2025 released yesterday. 

The growth in originations was driven mainly by a rebound in refinance activity, with rate-and-term refinances up 44% YoY and cash-out refinances increasing 19% over the same period. 

In addition, the home equity market saw its strongest YoY growth since 2022, rising 12% in Q1 2025. Generation X and Baby Boomers accounted for the majority of home equity originations, highlighting “strong demand among established homeowners with significant equity to leverage,” the TransUnion report states.  

Q2 2025 CIIR Mortgage Loan Info Summary

• Mortgage originations increased by 5.1% YoY in Q1 2025, driven by a rebound in refinance activity.
   
• Rate-and-term refinances rose 44% YoY, while cash-out refinances increased 15%. ​
   
• The home equity market experienced its strongest YoY growth since 2022, rising 12% in Q1 2025.  Generation Xers and Baby Boomers accounted for the majority of home equity originations. ​
   
• First mortgage delinquencies rose in Q2 2025, with the consumer-level 60+ days past due (DPD) rate increasing to 1.27%, nearing pre-pandemic levels.​ FHA loans accounted for 35% of these delinquencies. ​
   
• Performance of new originations: The Q2 2024 vintage outperformed the Q2 2023 cohort, but still trailed vintages from earlier years. ​

“Amid ongoing uncertainty surrounding tariffs and broader economic policy, the Federal Reserve has maintained a steady interest rate stance in 2025,” noted Satyan Merchant, senior vice president of automotive and mortgage business leader at TransUnion. "Some forecasts anticipate a potential rate cut in the second half of 2025, which would likely lead to a decline in mortgage rates.”

“If paired with housing inventory returning to pre-pandemic levels, this could stimulate increased mortgage origination activity,” he added. 

Q2 2025 Mortgage Trends

• The number of mortgage loans increased to 54.6 million in Q2 2025, up from from 54.1 million in Q2 2024. ​
   
• The consumer-level delinquency rate (60+ DPD) rose to 1.27% in Q2 2025, versus 1.14% in Q2 2024. ​
   
• Prior quarter originations increased to 1.0 million in Q2 2025, compared to 0.9 million in Q2 2024.
• The average loan amount of new mortgage loans increased to $353,080 in Q2 2025, up 5.6% from $334,352 in Q2 2024. ​
   
• The average balance per consumer increased to $265,597 in Q2 2025, compared to $259,125 in Q2 2024.
   
• The total balance of all mortgage loans increased to $12.6 trillion in Q2 2025, up 2.4% from $12.3 trillion in Q2 2024. ​

Key Takeaways

These latest TransUnion data suggest refinance activity — particularly rate-and-term loans — is leading overall market gains, with home equity lending showing renewed strength among equity-rich Gen X and Boomer homeowners. 

While rising delinquencies and elevated rates remain challenges, the potential for a Fed rate cut later this year could open the door for stronger purchase and refinance activity, especially if inventory improves. 

For mortgage pros, this means preparing to capture both refi and home equity demand now, while positioning marketing and outreach to move quickly if rates drop. Staying ahead on borrower retention, credit risk monitoring, and targeted equity-based products could help maximize opportunities in the shifting 2025 mortgage landscape.