An Experian trend analysis of first quarter mortgages and bankcards shows a 16% increase in mortgage origination volume and a 20% jump in bankcard limits, both compared with the year-ago period.
The upward trend in originations, seen over the past eight quarters, points to a consistently improving housing market, according to Experian. Mortgage delinquency rates also improved, reaching multi-year lows. There was a slight rise in late-stage 90- to 180-day delinquencies that may be the result of ongoing stress in specific housing markets.
Average home prices increased slightly from 2011. California is the highest, with an average home price of $325,000. The South Central region increased to $169,000, surpassing the Midwest, which came in at $163,000. Regional share of originated mortgage dollars showed strong activity in the Midwest as the new year began, with the region rebounding by growing 27% year over year to $101 billion. For the first time in two years, the region surpassed California, which grew by 6% to $92 billion.
This year is off to a solid start given continued upward trends in origination activity, said Linda Haran, director of product management and strategy for Experian Decision Analytics. With loan delinquency continuing to show exceptional performance, combined with the growth in originations over the past year, we expect to see a strong remainder of the year, and an improving economy can keep this performance going.
Bankcard performance is also near record lows for each of the delinquency periods. Experian saw a slight seasonal uptick in charge-offs from 3.9% to 4.3%, but other than that, it was another strong quarter for payment performance. The 30 to 59 days past due figure went to 0.94% six basis points lower than the previous quarter. Also, the 60 to 89 number went to 0.59% from 0.65%, and the 90 to 180 figure was flat at 1.56%.
Experian also is seeing increased bankcard lending in the prime and super-prime space. Significant year-over-year growth rates occurred within the near-prime segment, which saw a 42% increase, while the prime space grew 30%.
There is clearly opportunity in the near-prime segment, and lenders are definitely starting to loosen their criteria to acquire some bankcard growth, said Haran. We have always felt that near-prime consumers were ready to take on a little more debt than was being extended to them. This is a trend that we will continue to watch from a delinquency standpoint to get a sense of how near-prime paper is performing.
In reviewing the 30-plus-day delinquency rate by state for the quarter, Experian saw North Dakota lead the best-performing states, with the lowest rate of 1.94% - followed by Alaska at 2.23%, Wyoming at 2.34%, South Dakota at 2.41% and Iowa at 2.42%. The poor performing states included Nevada at 3.81%, Arizona at 3.79%, Florida at 3.71%, Mississippi at 3.51% and Alabama at 3.40%.