Consumers More Likely to Make Timely Payments on Home Loans
When it comes to paying off debts, Americans do not treat all bills with the same priority.
A recent study has shown Americans are more likely to make their home loan payments on time versus their credit cards.
This study was run by TransUnion, a major credit bureau. TransUnion analysts looked at the delinquency rates of both mortgage loans and credit cards.
They found delinquency rates were lower for mortgages. They also expect this trend will continue for the foreseeable future.
At a first glance, it seems obvious that Americans would prioritize their mortgage payments over their credit cards.
“Analysts found delinquency
rates were lower for mortgages.”
However, for the past few years, this was not the case.
When the housing bubble collapsed, many homeowners were underwater on their home loans, meaning they owed more in debt than their homes were worth.
Many decided to forgo paying their mortgage and focus on paying their credit cards instead. Now that the housing market is looking stronger, this trend has switched back to more normal conditions.
As the housing market continues to improve, Americans should continue to prioritize paying off their mortgage loans over their credit cards. Hopefully, the delinquency rates for both types of debt can keep going down.
Source: dailyherald.com. Photo source: investingnownetwork.com.