The performance of home-equity installment loans and lines of credit that are owned by the nation’s banks made a quarter-over-quarter and year-over-year improvement.
Thirty-day delinquency on banks’ consumer credit assets as of the second quarter was 1.36 percent. The rate reflects performance on eight categories of closed-end installment loans.
Compared to the previous quarter, the composite ratio has fallen 17 basis points.
A 21-basis-point improvement was made compared to the same quarter last year.
The performance statistics were reported by the American Bankers Association.
“Consumers continue to impress with their ability to manage debt prudently and keep spending under control,” ABA Chief Economist James Chessen stated in the report. “The drop in gas prices from last year has provided a big boost to disposable income and has freed up money that makes debt obligations a bit easier to handle.”
On just home-equity loans, ABA reported that 30-day delinquency was 2.90 percent, tumbling from 3.12 percent in the first quarter.
HEL delinquency was 3.36 percent in the second-quarter 2014.
The 30-day rate on home-equity lines of credit closed out the latest period at 1.34 percent. HELOC delinquency dropped from 1.42 percent three months earlier and
1.50 percent a year earlier.
“There is a strong correlation between rising home prices and falling home-related delinquency rates,” Chessen explained. “As the housing market continues to gain strength, we expect home-equity loan delinquencies to continue their downward trend.”
At
0.91 percent, however, delinquency on property-improvement loans was a basis point worse than in the prior report. But the category saw a six-basis-point improvement over the year-earlier report.
Mobile home loans had a delinquency rate of 3.55 percent in the second-quarter 2015, climbing three BPS from the previous quarter
but off a basis point from the same quarter in the previous year.
