Homeowners are in the best financial shape since well before the mortgage meltdown, according to new data
Write-offs on first mortgages, home equity lines of credit and home equity loans hit a nine-year low for Q1 in Mar5ch, according to new data from Equifax.
Write-offs year-to-date in March totaled $9.5 billion, according to Equifax’s late4st National Consumer Credit Trends report. That’s a 22.7% decrease from the same period in 2015.
“Homeowners are in the best financial shape they've been in since well before the start of the Great Recession,” said Amy Crews Cutts, senior vice president and chief economist at Equifax. “Total mortgage debt is down over $1 trillion, owner's equity is up to $12.5 trillion, nearly double the amount held in 2011, and low inventories of homes for sale are driving prices up at a modest pace. Moreover, the average interest rate on outstanding mortgage loans keeps falling as more and more homeowners refinance into rates below 4 percent, giving borrowers more spending capacity each month.”
The report also showed continuing improvement in severe delinquency rates. Severe delinquencies for first mortgages declined from 2.35% to 1.65% year over year. Home equity instalment loans saw a decline from 1.98% to 1.59% over the same period, and delinquencies on home equity lines of credit saw a drop from 1.47% to 1.33%.
On the downside, lending standards are remaining very tight. The median Equifax credit score on a new first mortgage was 749 in the first quarter, and the median score on new home equity lines of credit was even higher at 788.
Write-offs year-to-date in March totaled $9.5 billion, according to Equifax’s late4st National Consumer Credit Trends report. That’s a 22.7% decrease from the same period in 2015.
“Homeowners are in the best financial shape they've been in since well before the start of the Great Recession,” said Amy Crews Cutts, senior vice president and chief economist at Equifax. “Total mortgage debt is down over $1 trillion, owner's equity is up to $12.5 trillion, nearly double the amount held in 2011, and low inventories of homes for sale are driving prices up at a modest pace. Moreover, the average interest rate on outstanding mortgage loans keeps falling as more and more homeowners refinance into rates below 4 percent, giving borrowers more spending capacity each month.”
The report also showed continuing improvement in severe delinquency rates. Severe delinquencies for first mortgages declined from 2.35% to 1.65% year over year. Home equity instalment loans saw a decline from 1.98% to 1.59% over the same period, and delinquencies on home equity lines of credit saw a drop from 1.47% to 1.33%.
On the downside, lending standards are remaining very tight. The median Equifax credit score on a new first mortgage was 749 in the first quarter, and the median score on new home equity lines of credit was even higher at 788.
