ATLANTA (7/29/13)--A turnaround in home pricing trends is a factor on the improvement of consumer payment behavior and delinquencies in all major areas--except student loans--for the first half of 2013, reports Equifax in its latest National Consumer Credit Trends Report, released Friday.
The trend mirrors the trend in credit unions. Overall loan delinquencies reported by credit unions in May were 1.14% of loans, compared with 1.17% in April, 1.2% in March, 1.21% in February and 1.18% in January, according to the Credit Union National Association's Credit Union Monthly Estimates for May 2013, the latest information available.
The Equifax data reflect that the biggest improvement was in the home finance arena, with year-over-year serious delinquency rates (90-days or more past due or in foreclosure) declining sharply as a percentage of total balances outstanding:
Year-over-year changes in the 60-day-plus delinquency rates for other loans also decreased for bankcards, which dropped more than 16%--to 1.82% from 2.17%, and for auto loans, which decreased more than 11%--to 1.09% from 1.24%.
"The turnaround in home price trends over the past year is having a substantial impact on mortgage delinquency rates," said Equifax Chief Economist Amy Crews Cutts. "As more and more homeowners find themselves back in positive equity, the incentive to default is strongly tempered."
She noted that performance in other sectors is improving with the gradual economic recovery, but "we are seeing a strikingly different trend with student loan debt, which is both the fastest growing consumer debt segment and the only segment in which we're seeing rising severe delinquency rates and accelerating write-off rates."
Other results for home equity revolving, bankcards, auto and student loans are listed below.
Home equity revolving: