Rising values, low rates brighten payment pictureNovember 13, 2012 @ 8:02 am
U.S. homeowners are doing a better job of keeping up with their mortgage payments, aided by an improving housing market and low interest rates that are making it easier to refinance, the Associated Press reported.
The percentage of mortgage holders at least two months behind on their payments fell in the third quarter to 5.41 percent, the lowest point in more than three years, credit reporting agency TransUnion revealed.
The rate was down from 5.49 percent in the second quarter and was nearly 8 percent below the 5.88 percent rate in the third quarter last year, the company said.
The mortgage delinquency rate hasn't been this low since the first quarter of 2009. Still, it remains well above the 1 percent to 2 percent average historical range, an indication that many homeowners still are struggling to make their payments.
Many homeowners changed the way they prioritize their financial obligations after the value of their homes plummeted with the housing crash.
"People used to pay their mortgage first, and now they pay their auto and their credit cards before their mortgage," said Tim Martin, group vice president of U.S. housing for TransUnion.
U.S. home prices jumped 5 percent in September compared with a year ago, the largest year-over-year increase since July 2006, according to data provider CoreLogic.
Higher prices help bring down the number of homeowners who owe more on their mortgages than their homes are worth, potentially making it easier for them to lower their monthly payments by refinancing, A.P. reported.
And interest rates remain near record lows, making it possible for more homeowners to qualify for refinancing. The average rate on a 30-year mortgage was 3.40 percent last week and has been below 4 percent all year.
Meanwhile, there are some signals that the job market is improving. Employers added 171,000 jobs in October and hiring in August and September was much stronger than first estimated. The economy has gained an average of 173,000 jobs a month since July. That's up from 67,000 a month in April through June.
Still, unemployment remains stubbornly high at just under 8 percent.
Bonneville Media encourages site users to express their opinions by posting comments. Our goal is to maintain a civil dialogue in which readers feel comfortable. At times, the comments can descend to personal attacks. Please do not engage in such behavior. We encourage your thoughtful comments which: have a positive and constructive tone, are on topic, are respectful toward others and their opinions. Bonneville reserves the right to remove comments which do not conform to these criteria.