Recent Updates
- US: Housing Starts by State and Region (Mar)
- US: New Res Sales (Mar), S&P Case Shiller Home Price Indexes, FHFA HPI (Feb), Final Building Permits (Mar)
- US: Steel Imports (Mar-Prelim)
- US: Richmond Fed Mfg & Service Sector Surveys (Apr)
- US: Consumer Confidence (Apr)
- Belgium: Business Confidence (Apr)
- US: Regional Building Permits (Mar and YTD)
- Ireland: Bank Lending Survey (Q2)
- more updates...
Economy in Brief
U.S. New Home Sales and Prices Strengthen
Sales of new single-family homes during March increased 4.0% (8.8% y/y) to 694,000 (SAAR)...
U.S. FHFA House Price Index Continues to Strengthen
The FHFA index of U.S. house prices rose 0.6% during February...
U.S. Energy Prices Rise Further
Retail gasoline prices increased to $2.80 per gallon last week (14.3% y/y)...
U.S. Existing Home Sales & Prices Rise Again
The NAR reported that sales of existing homes increased 1.1% during March (-1.2% y/y) to 5.600 million units (AR)...
PMIs Stabilize or Creep Higher After Drop-Off
In the EMU, both the services and manufacturing sectors took a substantial step down one month ago...
by Tom Moeller October 20, 2010
Recent trends can be encouraging, but delinquency levels are less heartening. That is the message the American Bankers Association data which indicates that loan delinquencies across all types of credit recently have fallen. That may be the expected effect with the emergence of the economy from recession. (Now comes the big however.) However, as the accompanying charts and table indicate, the declines have been modest and leave delinquencies still quite high.
Amongst open-end loans, the decline in bank-card
delinquencies has been most dramatic. At 3.63% of loans outstanding, the
rate has fallen more than one percentage point from its high. The decline
no doubt reflects consumers' conscious effort to reduce debt levels. Other
open-end bank loans such as home equity and non-card revolving financing
also have shown a similar, but relatively modest, decline.
By-and-large, delinquency rates on closed-end loans remain high. Here, the effects of a total unemployment rate near 17% and a median duration of unemployment at roughly 34 weeks are at work. The most disturbing increase may be the surge in delinquencies on personal loans. Its recent decline to 3.6% still leaves it up from under 2.0% as recently as 2007. Making home equity loan payments also has proved difficult. The delinquency rate of 4.0% is nearly double that of late-2006, a clear reflection of loan values exceeding property valuations. And then there's the doubling of educational loan delinquencies to 8.7%. The unemployment for individuals with a bachelors degree or higher has more-than-doubled to 4.4%. Elsewhere, the decline of automobile loan delinquencies may reflect a switch to leasing. The drop in property improvement delinquencies may just reflect a drying up of the business.
The delinquency rate figures can be found in Haver's DLINQ database.
Underwater Mortgages from the Federal Reserve Bank of San Francisco is available here.
Consumer Credit Delinquency Rate (%) | September | August | 2009 | 2008 | 2007 |
---|---|---|---|---|---|
Open-end Loans | |||||
Bank Cards | 3.62 | 3.72 | 4.39 | 4.52 | 4.38 |
Non-card Revolving | 1.21 | 1.33 | 1.46 | 1.35 | 1.12 |
Home Equity | 1.81 | 1.84 | 2.04 | 1.46 | 0.96 |
Closed-end Loans | |||||
Home Equity | 3.97 | 3.94 | 4.32 | 3.03 | 2.39 |
Property Improvement | 1.35 | 1.32 | 1.63 | 1.75 | 1.81 |
Educational * | 8.69 | 8.91 | -- | -- | 5.39 |
Mobile Home | 4.01 | 4.11 | 3.41 | 2.96 | 2.92 |
Marine | 2.20 | 2.12 | 1.63 | 2.35 | 1.57 |
Personal | 3.55 | 3.57 | 3.63 | 2.88 | 2.48 |
Indirect Auto ** | 3.01 | 3.02 | 3.15 | 3.53 | 3.13 |
Direct Auto | 1.67 | 1.79 | 1.94 | 2.03 | 1.90 |
* Break in data series in 2008 & 2009
** A direct loan is a loan directly from the bank to the customer. An indirect loan is a loan that is given to the customer from the dealership who then has to go through a bank.