In the fourth quarter of the same year, the numbers in housing delinquencies also rose according to the Consumer Credit Delinquency Bulletin of the American Bankers Association (ABA).
Although there has been a slight rise in the delinquency levelsin 2016, it has still remained relatively low and should not be seen as a sign of a brewing mortgage crisis. This can be attributed to the employment growth and income increase and, most importantly, consumers being very cautious in keeping their debts current and managing their finances.
There is only a 0.02% increase in the number of home equity loan delinquencies, which brings it to 2.61% in the fourth quarter of 2016. Delinquency rise in the mobile home loan sector is slightly higher which is at .96%, bringing it from 3.11% to 4.07 %.
These home-related delinquencies can be in proportion to the surge and continuous improvements in housing lending industry. Mortgage Bankers Association’s (MBA) latest data show a $409.6 Billion in mortgages for both commercial and multifamily units in 2016.
The number of multifamily units alone established $214.1 Billion, which is the highest origination volume in 2016. Other properties such as buildings, rental units, industrial, commercial and healthcare are not far behind.
Economist Sees a Downward Trend
The industry remains healthy despite this rise in numbers. According to ABA Chief Economist James Chessen, the steady growth in employment and the rising income has kept the levels at ‘healthy’ lows. He foresees a downward trend in these numbers as “borrowers are better positioned to honor their debts”.
And although close-ended loan delinquencies increased by 0.1% according to ABA’s composite ratio, Delinquencies in the home equity lines of credit in the open-ended loan bracket was down from 1.16% to 1.06%.