Consumer loan delinquencies fell in the third quarter ended Sept. 30 for the first time in 2011 thanks to improving job and housing markets, the American Bankers Association said.
Delinquencies fell across seven of the loan categories the association tracks, including two of the largest categories. Delinquencies on indirect auto loans, or those arranged through a third party such as an auto dealer, fell to 2.6% from 2.89% a quarter earlier, the ABA said Thursday in its Consumer Credit Delinquency Bulletin.
Credit card and home equity lines of credit delinquencies increased slightly in Q3. Credit card late payments ticked up to 3.25% of all accounts, from 3.22%, and home-equity credit line delinquencies increased to 1.93% of all accounts, from 1.91% in Q2.
The survey defines delinquency as a late payment that is 30 days or more overdue. It found that home-equity loan delinquencies fell to 4.12% in Q3r, from 4.38% three months earlier as the housing market moved closer to stabilization, James Chessen, the ABA’s chief economist, said in a statement.
“Subtle improvements in the economy such as lower gas prices and a better job market have reduced some of the stresses facing consumers,” he said. “Improvement in delinquencies over the next year hinges on the housing market, which still poses an enormous challenge to continued economic growth. Job creation and income growth are also a must if we hope to see delinquencies continue to fall.”
