The economic crisis that affected the United States, and other parts of the world has caused many people to lose their jobs. The unemployment rate continues to rise, and immediate solution is not in sight.
Joblessness can affect several aspects of a person's life, but in the United States, it has mostly affected the capability of American homeowners to pay for their monthly mortgage payments. Unemployment has led to the increase in the rate of mortgage delinquencies.
According to the latest report from Equifax, one of the largest credit bureaus, in August 7.58 percent of American homeowners failed to make their monthly mortgage payment on time, up from 7.32 percent in July. These homeowners were more than thirty days late in their mortgage payments.
The latest statistics are alarming when compared to the statistics of two years ago. In August 2007, 3.44 percent of homeowners fell behind on their mortgage payments while in August 2008, it was 4.89 percent.
In addition, holding company, Moody's, reported a 32 percent increase in personal bankruptcy filings in the month of August.
These statistics say a lot about the current financial condition Americans are experiencing. Unemployment is not only a struggle to have enough food on the table. It is also a struggle to keep the roof over one's head. If this trend continues, it can lead to foreclosures.
The federal government, however, is optimistic. The housing market is showing signs that it is slowly recovering from the slump of the past few years.
The American consumers are also changing their spending habits. Despite the increase in mortgage delinquencies, Americans are keeping up with other bills. The Equifax report showed that credit card delinquencies dropped in August. The trend is consistent for the last three months. Subprime card delinquencies also fell.
Americans are also saving more. The current savings rate is 5 percent, which, according to Equifax, is a rate that the United States has not experienced in years.
There might be some truth to the cliche that for every bad thing that happens, a good thing arises.
With the government effort to revive the economy, the unemployment rate may decrease, and, as a consequence, mortgage delinquencies may also decrease. We will have to see.
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