Delinquent home-equity loan rates lowest since 2008
Posted on Friday, July 10, 2015 at 10:12:31 AM
Fewer Americans are falling behind on their home loans. In fact, the fewest since 2008.
With the housing market healing, more people are able to pay off their loans before they become 30 days or more overdue. The American Bankers Association reported Thursday that the delinquency rate for fixed-term home-equity loans dropped to 3.12 percent in the first quarter, the lowest it has been since December 2008, according to The Wall Street Journal. Though lower than it has been in years, the fixed-term home-equity loan is still higher than the 15-year average of 2.75 percent.
The delinquency rate on home-equity lines of credit also fell, down to 1.42 percent from 1.48 percent from the previous quarter, the lowest it has been in seven years.
"As property values improve, fewer people have negative equity in their homes. Greater household wealth and income gives consumers more breathing room to meet their financial obligations." James Chessen, chief economist for the American Bankers Association, explained.
Following the recession people have been much more cautious about the home loans they apply for, as well as paying off their residential financing. This has depressed the delinquency rate on home loans, making for a healthier housing market.