Consumer pessimism hits two-year low, and 10 million borrowers are waiting to refi

Consumers are navigating one of the more complicated economic environments in recent memory. Inflation is back as the top household financial concern, gas prices spiked sharply after the Iran conflict began, and income growth is slowing for high earners.

However, new data from TransUnion shows an overall optimism despite the ongoing headwinds, which is some welcome good news for mortgage professionals.

According to the company’s Q2 2026 Consumer Pulse Study, 55% of US consumers said they were optimistic about their household finances over the next 12 months, unchanged from a year ago. More notably, consumer pessimism fell to 23%, down from 27% in Q2 2025, which was an all-time high in the survey series.

Charlie Wise (pictured top), SVP and head of global research and consulting at TransUnion, said the resilience in the numbers surprised him, given all the economic challenges.

"The level of optimism is really steady from year to year, with the majority of consumers — about 55% — saying that they're optimistic about their household finances," Wise told Mortgage Professional America. "While at the same time, the percentage who are pessimistic actually dropped fairly meaningfully year over year. Despite a lot of headwinds, despite really disturbing prices at the gas pumps, consumers are generally feeling optimistic about their household finances."

‘Sandwich generation’ struggles

Not all of the news in the survey was positive. The generational breakdown surfaced one finding Wise said he did not anticipate. Gen X consumers reported the highest level of unaffordability across every single spending category in the survey, from gas and groceries to travel, dining out, housing, and eight others. No other generation came close on every measure.

Wise said the likely driver is what researchers call the sandwich generation dynamic. Gen X consumers in their 40s and 50s are often simultaneously supporting their own children while also caring for aging parents, putting pressure on budgets at a stage of life that should, by most measures, be financially stable.

"Several factors likely contribute to Gen X affordability angst, particularly the sandwich generation dynamic of supporting children while caring for aging parents, which may put greater strain on their household budgets," he said.

Line chart showing consumer optimism and pessimism about household finances from Q1 2021 to Q2 2026, based on TransUnion Consumer Pulse Study data.

Source: TransUnion Q2 2026 Consumer Pulse Study, n=2,996 US adults

For mortgage brokers, Gen X buyers still make up a large portion of customers. They are typically in their prime earning years. Move-up buyers, downsizers, and second-home purchasers tend to come from this group, and affordability concerns across every spending category are keeping many of them on the sidelines.

Housing ranked lower on the affordability concern list than Wise expected, sitting around the middle of the 13 categories measured. He said that homeowners are locked into payments that do not change month to month, so they do not experience the same kind of fresh sting that a tank of gas produces.

"For a lot of consumers, that cost is relatively static," he said. "Your mortgage payment doesn't change every month. And I think that's where consumers essentially said, I'm not feeling worse today about my housing costs relative to where it was six months ago."

A building refinance market

The Consumer Pulse Study, which surveyed 2,996 US adults between April 23 and May 11, 2026, captures sentiment, but TransUnion’s origination data tells the story of what is actually sitting in the market.

Wise said more than 10 million mortgages have been originated at interest rates above 6% since 2022, with roughly half of those above 7%. He said these are borrowers who entered the market during an elevated rate environment and have been waiting, in many cases expecting, that rates would ease enough to allow them to refinance.

"We do see every time the rates kind of dip down close to 6%, a flood of people coming off the sidelines to refinance," Wise said. "And then rates seem to go back up, and that was short-lived. But there's a lot of that pent-up opportunity of consumers that are waiting."

The home equity sitting behind that pent-up demand makes the potential size of the opportunity even larger. Wise said US consumers are holding roughly $21 trillion in untapped home equity that has not been accessed through cash-out refinances or home equity products.

Wise said brokers need to be positioned before the window opens, not after.

"I can't imagine there's a whole lot of mortgage lenders and brokers out there who are not kind of sitting at the ready waiting for this to happen, but they need to be ready because again, these opportunities may be short-lived, but may be pretty furious," he said.

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