U.S. Consumer Getting Stronger, Loan Delinquencies Continue to Fall

U.S. consumers continued to pay down debt in the first quarter of 2013 as household wealth rose above its pre-recession peak, the American Bankers Association said on Tuesday.

A composite ratio, which tracks delinquency rates for eight loan categories, fell to 1.7 percent of all accounts from 1.99 percent the prior quarter, well below the 15-year average of 2.37 percent. Of the eight categories, only mobile home delinquencies rose.

Delinquencies on bank card payments, which are not part of the composite, fell to 2.41 percent during the quarter, a 22-year low.

"Many consumers have learned the hard lessons of recession, and have redoubled their efforts to keep debt at manageable levels," ABA's chief economist, James Chessen, said in a statement.

In addition, rising home and stock prices are creating a wealth effect that gives consumers a greater ability to pay down their debt, he said.

Property improvement and home equity loan delinquencies both fell, while home equity lines of credit delinquencies moved slightly higher. Home-related delinquencies remain elevated.

"While this improvement is encouraging, it will take a long time for delinquencies to work their way through the system and return to more normal levels," said Chessen.

The ABA also tracks late payments for bank-provided credit cards, auto loans and other consumer loans. The bank association defines a delinquency as a late payment that is 30 days or more overdue.

The ABA does not track delinquency rates for traditional mortgage payments, which rose in the first quarter according to a report from the Mortgage Bankers Association.

(Reporting by Paige Gance; editing by Karey Van Hall and Leslie Adler)