About 2.91% of home equity loans were delinquent (30 days or more past due) in the third quarter – a slight increase compared with 2.90% in the second quarter, according to the American Bankers Association's (ABA) Consumer Credit Delinquency Bulletin.
Regardless, delinquencies on home equity loans decreased compared with a year earlier and have been trending downward for the past several years.
Meanwhile, delinquencies on home equity lines of credit decreased three basis points to 1.31% of all accounts, while delinquencies on property improvement loans decreased four basis points to 0.87% of all accounts.
The report tracks delinquencies in 11 individual loan categories. Overall, delinquencies were down across most other loan types in the third quarter – a sign that the economy is improving.
‘The economy remains positive even though its momentum slipped a little in the third quarter,’ says James Chessen, chief economist for the ABA, in a release. ‘Slower job and household income growth made for fewer improvements in delinquency rates. Fortunately, consumers remained disciplined in managing their debts, which has kept delinquencies close to historical lows.
‘The steady decline in home-related delinquencies has been a bright spot as they grind their way back to pre-recession levels,’ adds Chessen. ‘We expect this trend to continue as the housing market keeps gaining strength.’
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