The serious mortgage delinquency rate declined, credit card popularity is on the rise and both personal and auto loans are at all time highs in the second quarter of 2016, according to a new survey by TransUnion.

The serious mortgage delinquency rate (60 or more days past due) was 2.30%, a drop of more than 18% from 2.82% in the second quarter of 2015. The three states that saw their delinquency rates rise were– North Dakota (+10.8%), Wyoming (+9.6%), and West Virginia (+0.5%).

Mortgage originations were at the lowest in 5 years, down from 1.48 million in Q1 2015, to 1.46 million in Q1 2016.

TransUnion had said that the average mortgage debt per borrower was up 2.3% in the last year to $192,749 which is in line with Case-Schiller Home Price Index that rose from 178.92 to 188.29 within the last year (May 2015 to May 2016).

“The mortgage sector continues to perform well, and we expect originations to be more robust when the full Q2 numbers become available. This is mostly due to the unusually low interest rates available as a result of Brexit and other macroeconomic factors,” said Joe Mellman, vice president and TransUnion’s mortgage line of business leader. “While the mortgage sector performs well, we continue to pay special attention to states impacted by the energy crisis. States with economies heavily reliant on oil and energy are bucking the trend and experiencing higher delinquency rates.”

Trends in the Mortgage Market

Mortgage Lending Metric Q2 2016 Q2 2015 Q2 2014 Q2 2013
Delinquency Rate (60+ DPD) per Borrower 2.30% 2.82% 4.02% 4.35%
Average Debt Per Borrower $192,749 $188,504 $187,999 $185,687
Prior Quarter Originations* 1.46 million 1.48 million 1.03 million 2.04 million

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Credit Cards

10 million people had obtained a new credit card in the last year, and 133 million Americans now have at least one credit card, according to TransUnion. Millenials were behind the rise with 52% of those opening their first credit card during the second quarter of 2016.

“Credit card usage continues to increase at levels in line with consumer confidence and likely due to a relatively strong employment market,” said Paul Siegfried, senior vice president and TransUnion’s credit card line of business leader. “Consumers tend to apply for more credit cards and use them more frequently when they are gainfully employed.”

Trends in the Card Market

Credit Card Metric Q2 2016 Q2 2015 Q2 2014 Q2 2013
Total General Purpose Card Balances $662 billion $623 billion $601 billion $580 billion
Subprime % of Total Balance 11.0% 10.3% 10.3% 10.5%
Delinquency Rate (90+ DPD) Per Borrower 1.29% 1.20% 1.31% 1.39%
Subprime Delinquency Rate 11.65% 11.12% 11.95% 12.69%
Average Debt Per Borrower $5,247 $5,197 $5,228 $5,222
Subprime Debt Per Borrower $5,063 $4,891 $5,080 $5,195
Prior Quarter Originations* 15.28 million 13.50 million 12.13 million 9.92 million

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Personal Loans

Personal loans had reached all time highs in the second quarter of 2016, with both total unsecured personal loan balances and average balances on the way up, and the serious delinquency rate reaching its lowest post-recession level, according to TransUnion.

Total personal loan balances grew 26.2% to $96 billion in Q2 2016, up $20 billion from Q2 2015. Average debt per personal loan borrower rose 9.1% from $7,102 in Q2 2015, to $7,745 in Q2 2016.

“Despite recent concerns about the FinTech market, our data show consumers’ appetite and need for unsecured personal loans continues to grow,” said Jason Laky, senior vice president and automotive and consumer lending business leader for TransUnion. “In the second quarter of 2016, more consumers had access to personal loans than ever before. In fact, there are now nearly 3 million more consumers with a personal loan compared to two years ago. Most importantly, consumers continue to perform well on these loans as delinquency rates remain steady.”

Trends in the Unsecured Personal Loan Market

Unsecured Personal Loan Metric Q2 2016 Q2 2015 Q2 2014 Q2 2013
Delinquency Rate (60+ DPD) Per Borrower 3.30% 3.32% 3.68% 3.63%
Average Debt Per Borrower $7,745 $7,102 $6,501 $6,035
Prior Quarter Originations* 2.99 million 2.63 million 2.40 million 2.03 million

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Auto Loans

More than five million additional consumers had an auto loan in Q2 2016, compared to Q1 2016, according to TransUnion’s latest Industry Insights Report. The number of consumers with an auto loan increased 7% from 72.87 million in Q2 2015, to 77.95 million in Q2 2016.

In Q2 2016, the average auto loan balance per consumer grew 2.7% and reached $18,177, the highest level post-recession. The average balance was up from $17,699 in Q2 2015.

“In recent years, the auto industry has experienced strong growth in truck and SUV sales, which we believe is one of the drivers for higher average auto balances,” said Laky. “Strong economic fundamentals — particularly low gas prices and rising employment — are contributing to the continued growth in the auto sector.”

Trends in the Auto Market

Auto Lending Metric Q2 2016 Q2 2015 Q2 2014 Q2 2013
Delinquency Rate (60+ DPD) Per Borrower 1.11% 1.00% 1.09% 0.95%
Average Debt Per Borrower $18,177 $17,699 $17,127 $16,424
Prior Quarter Originations* 6.93 million 6.51 million 6.23 million 5.75 million

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Erik Sandstrom
LoanSafe's Mortgage Expert

I’m a Senior Loan Officer and LoanSafe mortgage expert. If you need a live rate quote, or need help getting a new mortgage, please call me direct anytime at 619-379-8999.