LOS ANGELES (AP) — U.S. homeowners are doing a better job of keeping up with mortgage payments, a trend that has reduced the rate of late payment on home loans to the lowest level in more than five years.
The percentage of mortgage holders at least two months behind on their payments fell in the October-December quarter to 3.85 percent from 5.08 percent a year earlier, credit reporting agency TransUnion said Wednesday.
The last time the mortgage delinquency rate was lower was 3.61 percent in the second quarter of 2008. The firm's data go back to the second quarter of 2007.
The latest rate also declined from 4.09 percent in the third quarter, the firm said.
Struggling homeowners have seen their finances shorn up by rising home values, an improving job market and efforts to restructure home loans so they're more affordable. That has enabled them to make timely payments.
Another key driver in the improved late-payment rate: Many of the risky home loans made before 2008 that went unpaid are no longer a factor, since the homes have been sold or foreclosed upon. Loans issued since then, after banks tightened lending standards, are less likely to go unpaid.
"We are on the downward slope of the mortgage delinquency curve, so we expect to continue seeing delinquency rates that have not been seen for several years," said Steve Chaouki, head of financial services for TransUnion.
The rate of late payments on home loans has been steadily declining over the past two years. At the same time, U.S. home sales and prices have been rebounding over the past two years, while foreclosures have been declining.
Moderate but stable job gains, still-low mortgage interest rates, and tight supply of homes for sale have helped fuel the housing rebound. That's also made it easier for homeowners to refinance, catch up on payments or sell their home, avoiding foreclosure.
Many borrowers also are making keeping up with their mortgage payments a priority over other financial obligations, encouraged by rising home values and lower unemployment, Chaouki said.
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