WASHINGTON Jan 9 U.S. consumer delinquencies
dropped sharply in the third quarter of 2013 as the economy grew
and the housing market improved, the American Bankers
Association said on Thursday.
Late payments dropped significantly in two home-related loan
categories, the bank industry group said. Home prices rose
during the period, for their strongest year-over-year gain in
more than seven years in September.
"More jobs and higher income are a recipe for lower
delinquencies," said James Chessen, the ABA's chief economist.
The group also said consumers managed their finances better
during the quarter.
The bankers association defines a delinquency as a payment
that is more than 30 days overdue. It does not track traditional
A composite ratio that reflects late payments in eight loan
categories, including personal and auto loans, fell 13 basis
points during the quarter to 1.63 percent of all accounts, a
record low, the ABA said.
The U.S. economy expanded at the fastest pace in nearly two
years during that period.
Consumer delinquencies are expected to hover at low levels
as the economy continues to improve, the bank group said. Late
payments declined or held steady for nearly all of the
categories in the composite ratio during the third quarter,
although delinquencies rose for property improvement loans.
Late payments on bank cards, which are not included in the
composite ratio, rose to 2.55 percent from 2.42 percent in the
second quarter. Bank card delinquencies remain well below their
15-year average, the ABA said.