Los Angeles: Many US homeowners are once again giving priority to their mortgage payments over keeping up with their credit card bills. That’s the conclusion of a study by the credit reporting agency TransUnion.
The firm examined late-payment rates of mortgages, credit cards and auto loans between 2003 and 2013 among consumers with the three types of financial obligations.
The study found consumers began falling behind on their credit card payments at a greater rate than their mortgage payments last September. That marked a reversal after a five-year period during which the late-payment rate on credit cards trailed that of home loans.
The shift comes as home values are rising, foreclosures are declining and the economy is steadily adding jobs.
Average US rates on fixed mortgages are edging closer to historically low levels. Mortgage buyer Freddie Mac said the average rate for the 30-year loan fell to 4.32 per cent from 4.37 per cent last week. The average for a 15-year mortgage eased to 3.32 per cent from 3.38 per cent.
Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases, which have helped keep long-term interest rates low.
Deeming the economy to be gaining strength, the Fed announced in December and January — and again last week — that it was reducing its monthly bond purchases.
