Four in Five Recent Home Buyers May Look to Refinance in the Next 12 Months to Help Alleviate Strain on Personal Finances
Rhea-AI Summary
A new TransUnion survey reveals that 80% of recent home buyers may consider refinancing their mortgages in the next 12 months as interest rates begin to fall. The survey, conducted in September 2024, found that most consumers feel their existing auto and new mortgage payments are straining their household finances. 70% of recent home buyers cited more favorable loan terms as a key refinancing driver, while 67% mentioned better interest rates. For auto loans, 65% of respondents agreed their payments strain their finances, with 63% likely to refinance if it could reduce monthly payments. Credit unions dominate the refinance market with a 67% share in 2023.
Positive
- Strong refinancing potential with 80% of recent home buyers likely to refinance
- Credit unions hold dominant 67% market share in refinancing
- 52% of auto loan holders would refinance for $50-$149 monthly savings
Negative
- 80.1% of recent home buyers report mortgage payments straining finances
- 65% of auto loan holders report payment strain on household finances
Insights
The survey reveals significant refinancing potential in both mortgage and auto loan markets, with 80% of recent home buyers and 63% of auto loan holders likely to refinance in the next 12 months. This presents a substantial business opportunity for TransUnion's credit reporting and analytics services. Credit unions' dominant 67% market share in refinancing indicates strong competitive positioning in this space.
The data suggests a large-scale refinancing wave could emerge as interest rates decline, potentially driving increased revenue for TransUnion through credit checks and analytics services. The company's TruIQ and TruVision products are well-positioned to capitalize on lenders' need for refined customer targeting and risk assessment during this anticipated surge.
New TransUnion survey shows refinancing may offer relief for both home and auto owners as rates begin to fall
CHICAGO, Oct. 30, 2024 (GLOBE NEWSWIRE) -- A new TransUnion (NYSE: TRU) survey found that many consumers feel their existing auto and new mortgage payments are putting a strain on their household finances, and the prospect of falling interest rates has them ready to consider refinancing those loans.
The surveys of current auto loan customers and those consumers who have taken out a mortgage in the last 24 months were conducted between September 18 and September 27, 2024. They resulted in responses from 1,002 and 1,025 auto and mortgage loan customers, respectively.
“We surveyed this specific group of recent borrowers to better understand the drivers of refinance for both mortgages and auto loans,” said Jason Laky, executive vice president and head of financial services at TransUnion. “Millions of people financed homes and autos during this period of high interest rates, and many will look to refinance as interest rates decline.”
TransUnion’s survey found four in five recent home buyers say their mortgage payments are straining their finances and are looking to refinance their mortgage payments in the next 12 months.
Many Recent Home Buyers Say Their Current Mortgage Payment is a Strain on Their Personal Finances
| Opinions/Generation | All Consumers | Gen Z | Millennials | Gen X | Baby Boomers |
| Strongly Agree or Agree | |||||
| Neither Agree nor Disagree | |||||
| Disagree or Strongly Disagree |
Percent of Recent Home Buyers Who Anticipate Refinancing Their Mortgage in the Next Twelve Months if Rates Fall
| Opinions/Generation | All Consumers | Gen Z | Millennials | Gen X | Baby Boomers |
| Very Likely or Likely | |||||
| Neither Likely nor Unlikely | |||||
| Unlikely or Very Unlikely |
Source: TransUnion U.S. consumer survey
When asked the biggest factor that would ultimately drive them to pull the trigger on a refinancing decision,
“For many of these recent home buyers, their mortgage payment is their largest single payment each month,” said Satyan Merchant, senior vice president and mortgage and auto business leader for TransUnion. “The upside is that it is a payment that can be refinanced if the economic climate allows for it, and as interest rates begin to fall, this group of consumers should begin exploring this option. Conversely, lenders should be actively marketing to these refinance candidates, regardless of what their primary motivation to refinance may be.”
Similar Consumer Sentiments Found When Asked About Auto Loans
The survey also examined consumer sentiment towards their existing auto loans, payments and interest rates along with future plans regarding refinancing. Results indicated that there was a similar eagerness to refinance when interest rates eventually fall, and a similar response among consumers when asked if they feel that their current auto loan payments represent a strain on their household finances.
When asked the extent to which they agree that their current auto loan payment represented a strain on their personal finances,
The research also explored the sentiment of consumers who have already refinanced despite the relatively high interest rates. Many of these borrowers derived lower payments through longer terms.
From this standpoint, TransUnion data shows that credit unions continue to lead the way with
“Credit unions may be able to offer their members rates and service that larger more traditional banks cannot,” said Sean Flynn, senior director of community financial institutions at TransUnion. “Credit unions should lean into this fact and leverage available tools such as trended data and advanced analytics to seek out those consumers who may be able to refinance.”
To learn more about how TruIQ™ by TransUnion helps lenders make better, data-driven decisions faster with advanced analytics consulting services and enabling technologies, click here. To learn how TruVision™ allows lenders to use trended data to more precisely balance risk and opportunity with risk management products that identify and manage best-fit customers across the account lifecycle, click here.
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About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.
http://www.transunion.com/business
| Contact | Dave Blumberg |
| TransUnion | |
| david.blumberg@transunion.com | |
| Telephone | 312-972-6646 |
FAQ
What percentage of recent home buyers plan to refinance their mortgages according to TransUnion (TRU)?
How many auto loan holders report financial strain in TransUnion's 2024 survey?
What is the market share of credit unions in refinancing according to TransUnion's 2023 data?
