WASHINGTON—CUNA’s latest Economic Update points to growing issues with delinquencies.
In the update, Chief Economist Mike Schenk specifically notes:
- Mortgage delinquencies. With data obtained by Equifax, CUNA said its economists have found “slight upward movements” in mortgage delinquency rates
- Credit card delinquencies. Bigger increases in delinquency rates relative to the cyclical low – as seen during the COuVID-19 pandemic – is “concerning,” said Schenk
- Auto loan delinquencies. Data show a “dramatic” increase in delinquency rates among institutions such as auto financing companies
Schenk said CUNA economists believe that delinquency rates will peak at 1% by the end of 2024. Net charge-off rates are also believed to be heading towards 70 basis points. Both forecasts are higher than long-term norms, but only modest in comparison to the Great Recession.
Not in ‘Broad-Based’ Decline
“The U.S. economy is not in recession at the moment,” said Schenk. “Experts say recessions are defined as a significant broad-based decline in economic activity that lasts for more than a couple of months. With the labor market as strong as it is, it is very difficult to say that this is a broad-based decline in economic activity.”