Accelerated home price growth is likely to fuel the mortgage market for the foreseeable future, new study says
Mortgage originations increased by 49% annually during the second quarter, with new originations accounting for $145 billion of new mortgage debt, according to TransUnion.
The average balance of new mortgages issued grew by 22% year over year to $379,567. Originations represented more than $208 billion in new credit issued, with Q2 marking the second consecutive quarter of double-digit growth since the onset of the pandemic, TransUnion said in its Q3 2021 Credit Industry Insights Report.
“The rapid appreciation in prices might still keep the mortgage market growing modestly for the near term,” TransUnion said.
Read more: Consumer debt balloons despite slower mortgage growth – Equifax
Applications for credit increased by 2.2% annually, driven by the lower-risk prime plus and super prime consumer segments, TransUnion said.
“Consumer credit activity is heating up as the economy reopens and consumer confidence improves,” said Matt Fabian, director of financial services research and consulting at TransUnion. “As the recovery continues, lenders are loosening the tighter risk policies that were put in place during the pandemic, accelerating the supply of credit in the market and emerging for growth to meet consumer demand.”
Delinquencies continued to show declines across the board, with the share of mortgages unpaid for 90+ days falling by 5% annually to 0.13%.
“While delinquencies remained relatively low across products, there has been a small increase in delinquencies from consumers recently coming off deferrals on their credit products,” TransUnion said. “However, this represents a small segment – less than 10% of credit-active consumers took a deferral – and Canadian consumers as a whole continued to show resilience as the economy reopens.”
