Credit card debt, home loan delinquencies expected to decline in 2010
TransUnion expects delinquencies on credit cards and home loans to fall by the end of next year.
According to TransUnion, 2010 should see a decline in mortgage loan delinquencies when compared to this year. According to the company, the number of mortgage loans that are more than 60 days late on payment should drop from 6.56 to 6.39 percent. That would represent a 3 percent decline compared to the rates seen in 2009.
“We believe the nation will see a turnaround in mortgage delinquencies in the coming year,” Ezra Becker, director of consulting and strategy for the financial services group, said. “Tied directly to anticipated unemployment rates and housing values, the decrease in delinquencies should be gradual.”
Furthermore, TransUnion reported that it expects credit card delinquencies to fall next year, dropping from 1.07 to 1.04 percent. If the number of delinquencies does drop as forecast, it would represent a 2.8 percent decline in accounts that are more than 90 days late.
Becker said that the drop in delinquencies for credit card debt indicate consumers are trying to keep their debt to a “minimum” and are working “aggressively” to pay off what they owe. However, because the decline in credit card delinquencies is the smallest seen in three years, it may mean that consumers are reaching their limit when it comes to what they can afford to pay off.
Both card and mortgage delinquencies will depend upon the unemployment rate, which recently saw a decline. The number dropped from 10.2 to 10 percent in November, though many analysts predict that it will stay at or above that level for much of next year.
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