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  • Writer's pictureStephen Boatman

Q1 2024: Mortgage, Auto, and Credit Card 90 Day Missed Payments

I've seen a lot of articles about increasing missed payments regarding car loans, mortgage payments, and credit cards. But what does the data say when you step back into a 10-year time frame? You'll notice in the three charts below that delinquency rates for credit cards, auto loans, and mortgages have been increasing. I could go into my own musings on these charts but I'll let the data speak for itself.


90 Day Delinquent Credit Card Payments


Out of the three charts this will be the first payment to be missed. Missed payments are at their highest level in the past ten years. This should apply downward pressure on unnecessary expenses such as trips, clothes, jewlery, and could leak over to missed auto loan payments and maybe even missed mortgage payments.

90 day delinquent payments for credit cards

90 Day Delinquent Auto Loan Payments


As household cash dwindles we can see auto loan missed payments are starting to increase as well. However, this chart doesn't show the number of people underwater on their vehicles. If we could see that, I believe it would be a drastic uptick compared to the past five years. This is because vehicles increased in price drastically during 2021-2023. However, vehicle prices are returning to earth, and if you purchased a car in the 2021-2023 time frame, like me, you may have experienced more depreciation than is historically normal. Going forward I would expect more maintenance on current cars instead of upgrading or swapping because some individuals would have to pay off more than they could sell their car for. Forcing them to hold on to their vehicle longer than they may have intended.

90 day delinquent payments for auto loans

90 Day Delinquent Mortgage Payments


Mortgages have so much built in equity from the recent run up they are not as likely to miss payments, not to mention it is the last payment to be missed out of the three we are covering today. However, according to Bloomberg the number of people underwater on their homes (1 in 37) has been slowly increasing as home prices come down. Or as real estate agents like to say, prices have been improving. But last time I updated these numbers in Q3 of 2024 mortgages had a .5% delinquency rate and now they are at .6%.

90 day delinquent payments for mortgages

Summary


Most of the population's two most significant assets, homes and cars, are becoming harder to sell. Meaning that with turnover decreasing, the industries that make money buying and selling houses and cars (dealerships, real estate agents, mortgage brokers, and banks) will likely have less income than in the past three years. Cash is tightening at home around the US, and we are not in a cheap money environment anymore. The elephant in the room is what the Fed does with rates and money printing. I believe we need them to maintain rates around where they are now and not inject too much more cash into the economy. It's some medicine we need after the rampant spending we've run through over the past few years, and if we don't want to inflate our dollar away to nothing, it's what the level heads at the Fed will consider. Stay informed for smarter financial decisions with Flat Fee Financial.






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