CHICAGO—Making mortgage payments took priority over other forms of debt payments during the past year, as the home became an essential place for Americans to work, school their children, and stay safe during the pandemic, according to a new analysis.
Mortgage payments had the lowest rate of 30-day delinquencies, followed by car loan payments and credit card payments in the third quarter of 2020, according to a study of people who hold those three types of debts by TransUnion.
For the 27.8 million consumers who hold all three credit types, mortgage loans had a 30-day past-due rate of 0.75%, car loans followed with a rate of 1.13%, and credit cards at 1.95%, TransUnion found.
At various times, different credit payments have taken the top priority for people. In 2016, car loans were at the top of the hierarchy, CNN noted.
‘Different Set of Circumstances’
"The auto loan has been very important to people at times, because they needed a car to get to work," said Matt Komos, TransUnion's head of research and consulting in the US. "And after the housing crisis, in the last recession, when homes lost so much value, credit cards were prioritized above mortgages."
But the pandemic has presented a completely different set of circumstances, said Komos.
"The home has become so important for so many people this year," said Komos. "If people remained employed they are perhaps working from home now and schooling their kids at home and they want to be sure to have a safe place to be."