October 15, 2015 2:21 am
In more encouraging news for housing and the overall economy, loan delinquencies fell in two of three home-related categories in the recently released American Bankers Association’s Consumer Credit Delinquency Bulletin. The categories on the decline are home equity loan delinquencies, which fell to 2.90 percent, and home equity line of credit delinquencies, which fell to 1.42 percent.
“There is a strong correlation between rising home prices and falling home-related delinquency rates,” says James Chessen, chief economist of the American Bankers Association. “As the housing market continues to gain strength, we expect home equity loan delinquencies to continue their downward trend.”
Property improvement delinquencies edged up slightly to 0.91 percent. The American Bankers Association (ABA) defines a delinquency as a late payment that is 30 days or more overdue.
“The steady forward march of the economy has continued to strengthen consumers’ financial positions,” says Chessen. “Consumers continue to impress with their ability to manage debt prudently and keep spending under control. The drop in gas prices last year has provided a big boost to disposable income and has freed up money that makes debt obligations a bit easier to handle.”
Published with permission from RISMedia.