The third quarter of 2025 revealed portents of a recovery as mortgage originations climbed 8.8% in a market that continues to evolve, according to a new report from TransUnion.
Loans to Gen Z grew the fastest among age cohorts, with a 28% boost in home equity line of credit loans and a 23% spike in home equity loans. Baby boomers and Gen X still accounted for the highest share of home equity borrowers, however.
The third quarter of 2025 marked the fifth successive quarter of year-over-year growth in the home equity market, rising 14% in the second quarter.
“This growth was mainly driven by growth in rate and term refi, up 101% YOY and cash-out refinances increasing 23% over the same period,” the report stated.
At the same time, mortgage delinquencies rose in the third quarter. The consumer-level 60+ days past due on a loan payment increased to 1.36% from 1.24% a year prior. The lion’s share of these delinquencies was on FHA loans, while VA loans rose 35% year-over-year.
While noting signs of recovery in mortgage activity, “rising delinquency rates – particularly within certain borrower segments – underscore the importance of maintaining a vigilant and proactive approach to risk monitoring and portfolio management,” commented Satyan Merchant, TransUnion’s mortgage business leader.
Merchant also noted that the housing finance landscape was being reshaped by shifting demographics, dynamic monetary policy and the possibility of future Fed rate cuts.
Between 3Q 2024 and 3Q 2025, the number of mortgage loans rose from $54.1 million to $54.5 million. The average amount of new loans grew from $347,692 to $371,467, and the average balance per consumer from $260,900 to $268,060. The total balances of all mortgage loans climbed from $12.3 trillion to $12.7 trillion – a significant increase from the $11.5 trillion in 3Q 2022 and $11.8 trillion in 3Q 2023.
“As interest rates begin to ease, mortgage activity is showing signs of recovery, supported by improving affordability conditions,” Merchant stated.
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