LOS ANGELES (AP) — When it comes to paying the bills, the mortgage is once again more of a priority for many U.S. homeowners than their credit cards.
That's the conclusion of a study released Wednesday by credit reporting agency TransUnion, which examined about a decade's worth of U.S. consumers' payment data.
The shift comes as U.S. home values have been climbing, allowing many homeowners to build equity in their home and lifting others into positive equity after years owing more on their home than it was worth. An improving job market and greater access to credit cards also have contributed to the change.
"We are returning to the traditional trend as the forces in the marketplace that influence consumer payment preferences return to normal," said Ezra Becker, co-author of the study and TransUnion's vice president of research and consulting.
Before 2008, mortgages historically had a lower late-payment rate than credit cards, according to the firm.
But by the fall of 2008, as the financial crisis hit and the housing downturn and recession worsened, the trend reversed.
The national unemployment rate began to climb while home prices tumbled. That left many homeowners in a financial bind. As a result, many began falling behind on their mortgage payments at a greater rate than on their credit cards.
"This was a measurable result of the economic environment, wherein many consumers were underwater on their mortgages and at the same time needed the liquidity afforded by credit cards to make ends meet," Becker said.
By September 2008, 3.32 percent of mortgages were at least 30 days overdue, slightly higher than the late-payment rate of credit cards at 3.29 percent, according to the study.
Continue reading this story on the...