The percentage of home loans past due fell 12 basis points in the second quarter, to 4.24% of all loans, the Mortgage Bankers Association said Thursday.

The trade group attributed the improvement to a healthy economy and relatively low interest rates. But chief economist David Lereah said slower growth or higher rates "could curtail further improvement in delinquency rates for the rest of the year."

"Delinquency rates are not improving markedly right now, even though the economy is so good," he added. "That suggests that if we do have a downturn, delinquency rates will most probably rise."

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