More Focusing on Paying Down Mortgage
March 20, 2014
As home prices rise, consumers are once again prioritizing their mortgage payments over paying down credit card debt, according to a new report from TransUnion. It’s the first time since 2008 that borrowers have shifted their focus back to mortgage debt ahead of credit card debt.
Mortgage delinquencies are falling, too. The delinquency rate dropped to 1.71 percent in December, down from 3.32 percent in September 2008.
Following the housing crisis, many home owners were underwater on their mortgages, and some stopped making mortgage payments a priority, TransUnion notes.
“As unemployment rose and home prices cratered, many borrowers chose to value their credit card relationships above their mortgages,” says Ezra Becker, vice president of research and consulting at TransUnion. “When people lose jobs, they need credit cards as a source of liquidity.”
While consumers are placing more of a focus on paying their mortgages, the debt they still prioritize above mortgages continues to be auto loans, TransUnion reports.
Source: “Borrowers Paying Mortgages Over Credit Cards Again,” CNNMoney (March 19, 2014)
Updated: June 22, 2018