Financially stressed consumers are placing a higher value on keeping up with their mortgage payments, marking a return to precrash norms.

A new study by the credit rating agency TransUnion found that consumers who are having trouble paying their bills are prioritizing paying their mortgage over paying credit card debt, a reversal of the pattern that followed the downturn.

That's apparently due to increasing home values that give borrowers more reason to want to hang onto their homes, as the study also found a link between rising and falling home values and consumer preferences for prioritizing mortgage vs. credit card debt in tight financial circumstances.

"The results of previous TransUnion research showed that, beginning in 2008, consumers with both a credit card and a mortgage had a higher propensity to go delinquent on their mortgages than on their credit cards -- a reversal of traditional payment patterns," said Steve Chaouki, co-author of the study and group vice president in TransUnion's financial services business unit. "This occurred in an economic environment marked by the build-up and bursting of the housing bubble."

Autos still top priority

The study found that the rate of 30-day delinquencies on mortgages has almost drawn even with that of credit cards, after significantly exceeding it in each year since the crash. Auto loans continue to remain the highest debt priority of the three, a pattern that predates the downturn and has persisted throughout it.

The study found that 30-day delinquencies on mortgages average 1.91 percent of all mortgaged residences in 2012, compared to an average of 1.82 percent on credit cards. Those are down from the peaks of 3.83 percent and 2.82 percent, respectively, in 2009.

Early delinquencies on auto loans, on the other hand, were at 0.88 percent of all loans in 2012, down from a post-crash peak of 1.34 percent in 2009.

TransUnion projects that by the end of the year, rising home values will lead to a situation where most consumers will be paying their mortgages ahead of their credit cards.

Published on March 22, 2011