Purchase originations are expected to nearly double this year, but refinance growth will be much slower, TransUnion projected in its 2026 mortgage forecast released on Thursday.

Specifically, the national credit bureau projects purchase originations (by loan volume) will expand by 4% this year compared to the 2.3% growth it tracked in 2025. Meanwhile, refinance originations that swelled by 28.1% in 2025 are anticipated to grow by just 4.2% in 2026.

For comparison, the latest forecast from the Mortgage Bankers Association (MBA) suggests purchase originations will grow by 5.1% in 2026 from 2025 levels while refinance originations are projected to increase by around 8.3%, lower than the 9.2% growth in refinances that the MBA forecast for 2026 back in October.

While TransUnion did not include a prediction for the behavior of mortgage rates in its forecast, the degree of refinance activity will heavily depend on whether borrowing costs meaningfully decline below 6% this year.

Housing economists generally expect average rates for 30-year fixed-rate mortgages will hover around 6% or slightly higher for the duration of 2026.

The mortgage forecast was released alongside TransUnion’s quarterly Credit Industry Insights Report for the third quarter of 2025, which underscored “continued expansion” in consumer lending across most categories.

“At the same time, more consumers continued to drift away from the mid-level risk tiers and toward the highest and lowest risk tiers, reshaping portfolio dynamics for lenders,” the report stated, underscoring how post-pandemic credit markets are still trying to stabilize.

TransUnion reported that mortgage volumes rose by 6.5% in the third quarter of 2025, totaling around 1.3 million originations, buoyed by 26% year-over-year growth in rate-and-term refinances as borrowing costs declined measurably in late August and September.

As refinances overall grew for the eight consecutive quarter, cash-out activity expanded by more than 12% over the year in the third quarter, with the largest share of cash-out originations (38.8%) going to homeowners with credit scores at 760 or higher.

Home equity originations also sustained an upswing in originations dating back to early 2024, according to the credit insights report, as an unfavorable rate environment for many locked-in homeowners were incentivized to tap into record levels of home equity.

“As we move through 2026, easing 30‑year mortgage rates should improve affordability for both buyers and refinancers,” said Satyan Merchant, senior vice president and mortgage business leader at TransUnion, sharing his analysis in the newly released forecast.

The company also noted sustained growth in credit stress concentrated among government borrowers with mortgages insured by the Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs.

Of the 54.6 million outstanding mortgage loans in the fourth quarter, TransUnion reports that 1.58% were 60 days or more past due, up from 1.31% a year earlier and 0.89% during the fourth quarter of 2022. Average loan amounts on new mortgages have also steadily risen during that period, hitting $369,729 in the fourth quarter, up 10.3% over three years.

“We’re encouraged by the momentum created by falling rates, increased supply and strong equity positions,” Merchant added.