VantageScore, a credit measure provider that Fannie Mae and Freddie Mac lenders will be working with in conjunction with
The delinquency rate in this category jumped to 0.78% from 0.66% the previous month but remained well below the pre-pandemic level of 1.22% seen just prior to the pandemic in January 2020, according to
That mirrored a trend in the broader consumer credit market, where the short-term delinquency rate, as a percentage of outstanding balance, rose to 0.82% basis points from 0.71% the previous month. That jump also was the highest in its category for the past year.
The company's credit score for consumers remained fairly stable, falling slightly but by only 0.2 points, such that it remained at a rounded 702. It was 4.5 points higher than a year earlier.
Originations trended slightly higher in the past month, according to VantageScore.
"Even though June 2023 delinquency rates remained elevated, lenders did not shy away from making new loans," said Susan Fahy, executive vice president and chief digital officer at VantageScore, in a press release.
All four categories of consumer credit tracked by VantageScore experienced slight consecutive-month gains in new originations, but the one seen in the mortgage sector was the smallest. The increases broke down as follows: personal loans, up 0.4%; credit card, 0.24%; auto, 0.13%; and mortgage, 0.05%.
The mortgage gain may be particularly small because lenders have had relatively tight underwriting standards,
The mortgage industry also tends to look to other consumer finance sectors for signs of potential performance concerns as credit issues tend to hit non-mortgage loans first. That's because borrowers, with rare exceptions, generally prioritize home loan payments.
Banking regulators are considered likely to watch delinquencies and other credit indicators particularly closely right now as they've been working on
