Borrowing again: Mortgage debt increases most in 6 years
Total balance of first mortgages up to $7.97 trillion
First mortgages increased 2.8% from the same period a year ago, marking the largest year-over-year increase since September of 2008, according to the most recent Equifax national consumer credit trends report.
The total balance of first mortgages now sits at $7.97 trillion — the highest since December 2011.
Currently, delinquent first mortgages, those 30 or more days past due, represent 5.65% of the outstanding balances, dropping more than 22% from the same time last year.
In addition, the total balance of first mortgages 90-days past due or in foreclosure is less than $27- billion: a six-year low and a decrease of nearly 27% from the same time a year ago.
“The decline in mortgage balances from accelerated amortization and foreclosure write-offs has finally been overcome by increases in mortgage debt due to home purchase lending,” said Amy Crews Cutts, Equifax chief economist.
“This trend should gain additional momentum as we head into the spring and summer home buying seasons, which increases the volume of new loans coming in, while at the same time rising home values and improving employment conditions should push down the incidence of mortgage defaults,” Cutts continued.
Meanwhile, the report also found that the total balance of home finance write-offs year-to-date in February is $17.9 billion, 41% lower than the same time a year ago, and the total balance of home finance write-off dollars in 2013 was $149 billion, a decrease of more than 30% from 2012.
For the first time in four years, the total balance of home finance debt, which hit $8.58 trillion and includes first mortgage and home equity, increased year-over-year for three consecutive months.