Home Equity Credit Line Delinquencies at New High
Late payments on U.S. home equity lines of credit rose to a 21-year high in the first quarter of 2008 due to continued stress in the housing market and general weakness in the economy, the American Bankers Association said Wednesday.
In its quarterly report on consumer borrowing, the bankers group said the percentage of home equity lines that were more than 30 days past due rose to 1.1 percent from 0.96 percent the prior quarter.
That rate is the highest since the ABA started collecting the data in 1987.
"It was a tough quarter for some people," said ABA chief economist James Chessen in a statement. "Faced with rising food and gas prices and little income growth, fewer resources have been available to manage debt."
Bank card delinquencies also rose in the first quarter to 4.51 percent, which is slightly above the five-year average delinquency rate of 4.4 percent for the category.
Other delinquency categories showed improvement.
Indirect auto loan delinquencies fell to 3.09 percent during the first quarter from 3.13 percent the prior quarter. Property improvement loan delinquencies fell to 1.78 percent from 1.81 percent.
But Chessen said delinquencies will remain elevated in the near future.
"The tax stimulus is helping to boost personal income, but persistently high gas and food prices will eat away at overall resources," he said.