The just-released Q3 2021 Quarterly Credit Industry Insights Report (CIIR) reveals the auto, mortgage and personal loan industries all showed renewed signs of strength, along with a resurgence in the credit card industry — largely due to Gen Z.
While card issuers had pulled back and tightened new card volume during the pandemic, that trend has shifted: Credit card originations have nearly doubled, increasing from 8.6 million in Q2 2020 to a record 19.3 million in Q2 2021, with Gen Z’s share of originations increasing to 14.2%, up from 13.3% last year and 9.5% two years prior.
Consumer spending is also up, particularly among younger generations. In Q3 2021, the average per consumer balance for Gen Z increased 13.9% YoY, marking the second consecutive quarter of growth. Millennials also showed average balance growth per consumer with a 1.8% YoY increase.
Generation | Q2 2021 | Q2 2020 | Q2 2019 | Q2 2018 |
Gen Z (1995 and after) |
14.2% | 13.3% | 9.5% | 7.5% |
Millennials (1980–1994) |
32.7% | 32.6% | 29.7% | 30.0% |
Gen X (1965–1979) |
28.8% | 28.0% | 28.7% | 28.8% |
Baby Boomer (1946–1964) |
21.3% | 22.5% | 26.9% | 27.8% |
Silent (prior to 1945) |
3.0% | 3.6% | 5.2% | 6.0% |
Total originations (millions) |
19.3 million | 8.6 million | 16.4 million | 15.8 million |
“As the economy continues to show signs of recovery, card issuers are ramping up for growth and bringing younger consumers into the fold,” said Paul Siegfried, Senior Vice President and Credit Card Business Leader at TransUnion.
For more information about the report, please register for the Q3 2021 Quarterly Credit Industry Insights Report webinar. Read on for more specific insights about credit cards, personal loans, auto loans and mortgages.
The credit card market saw a record number of originations and the rebuilding of bankcard balances. Consumers with access to credit hit an all-time high of 194.3 million.
Our view: Lenders and consumers came roaring back to the credit card market — with record originations and expanding credit lines — while delinquencies stayed at historic lows. With continued balance growth and the winding down of remaining hardship programs, we expect a slow rise in delinquency. In the next quarter, the uncertainty surrounding supply chain issues could slow origination growth during the holiday season.
Q3 2021 Credit Card Trends
Credit card lending metric | Q3 2021 | Q3 2020 | Q3 2019 | Q3 2018 |
Number of CREDIT CARDS | 474.2 million | 451.9 million | 441.9 million | 427.2 million |
Borrower-level delinquency rate (90+ DPD) | 1.13% | 1.23% | 1.82% | 1.72% |
Average debt per borrower | $4,857 | $5,068 | $5,658 | $5,571 |
Prior quarter originations* | 19.3 million | 8.6 million | 16.4 million | 15.8 million |
Average new account credit lines* | $4,200 | $4,001 | $5,295 | $5,406 |
*Note: Originations are viewed one quarter in arrears to account for reporting lag.
The pandemic dramatically drove down unsecured personal loan originations, but in Q3, originations trended toward pre-pandemic levels, growing nearly 70% YoY.
Our view: The personal loan market has shown a solid return to lending, and lenders are recalibrating growth strategies and reviving below prime risk segments. As the economy continues to normalize, we expect this growth trajectory to continue over the next quarter.
Q3 2021 Unsecured Personal Loan Trends
Personal loan metric | Q3 2021 | Q3 2020 | Q3 2019 | Q3 2018 |
Total balances | $156 billion | $148 billion | $152 billion | $130 billion |
Number of unsecured personal loans | 21.6 million | 21.4 million | 22.5 million | 20.4 million |
Number of consumers with unsecured personal loans | 19.2 million | 19.5 million | 20.2 million | 18.5 million |
Account-level delinquency rate (90+ DPD) | 1.52% | 1.74% | 2.21% | 2.40% |
Borrower-level delinquency rate (60+ DPD) | 2.52% | 2.55% | 3.30% | 3.44% |
Average debt per borrower | $9,387 | $8,864 | $8,758 | $8,171 |
Prior quarter originations* | 4.4 million | 2.6 million | 4.8 million | 4.5 million |
Average balance of new unsecured personal loans* | $7,168 | $5,984 | $6,292 | $6,178 |
*Note: Originations are viewed one quarter in arrears to account for reporting lag.
Throughout 2021, the auto finance market has continued to show signs of strength with both origination growth and strong performance observed across all risk tiers.
Our view: While origination growth rebounded to a healthy level this past quarter, external factors, such as the uncertainty surrounding semiconductor chip shortages and supply chain issues, will continue to impact new vehicle inventory and increase prices. We anticipate this will affect vehicle sales through the remainder of the year (and possibly into 2022) despite growing consumer demand. Additionally, as accounts roll off hardship programs, we expect a slight uptick in delinquency.
Q3 2021 Auto Loan Trends
Auto lending metric | Q3 2021 | Q3 2020 | Q3 2019 | Q3 2018 |
Number of auto loans | 83.1 million | 83.7 million | 83.4 million | 81.9 million |
Borrower-level delinquency rate (60+ DPD) | 1.38% | 1.46% | 1.40% | 1.36% |
Prior quarter originations* | 8.2 million | 6.5 million | 7.3 million | 7.3 million |
Average monthly payment** | $508 | $464 | $454 | $438 |
Average balance of new auto loans* | $25,607 | $23,839 | $21,937 | $20,990 |
Average debt per borrower | $20,911 | $19,625 | $19,126 | $18,815 |
*Note: Originations are viewed one quarter in arrears to account for reporting lag.
**Data from IHSM Catalyst
Following several quarters of hyper growth, activity in the mortgage market has begun to slow. Origination growth was most pronounced for Gen Z consumers who entered the market and became first-time homebuyers.
Our view: We expect the trend of home purchases to continue to overtake refinances, especially if consumer demand for homes stays strong and inventory improves. This assumes mortgage rates continue to rise, which will cause refinances to decline.
Q3 2021 Mortgage Trends
Mortgage lending metric | Q3 2021 | Q3 2020 | Q3 2019 | Q3 2018 |
Number of mortgage loans | 51.2 million | 50.7 million | 50.3 million | 49.8 million |
Account-level delinquency rate (90+ DPD) | 0.60% | 0.81% | 1.02% | 1.14% |
Prior quarter originations* | 3.5 million | 3.3 million | 1.9 million | 1.7 million |
Mortgage origination* distribution – purchase | 53% | 43% | 72% | 78% |
Mortgage origination* distribution – refinance | 47% | 57% | 28% | 22% |
Average balance of new mortgage loans* | $305,140 | $293,731 | $278,724 | $254,533 |
*Originations are viewed one quarter in arrears to account for reporting lag.
For more information about the report, please register for the TransUnion Q3 2021 CIIR webinar.
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