USA Today reported that 30-day delinquencies on car loans are up by 8.1 percent from year ago levels. It notes that some people may have bought a more expensive car than they can afford. It also notes the rise in unemployment. It doesn't mention the housing crash. The loss of home equity will be a major factor in rising default rates on all forms of consumer credit. In prior years people who fell behind on debt payments because of job loss, health problems or other issues would have been able to withdraw equity from their home to pay their debts. This is no longer an option for tens of millions of homeowners who now have little or no equity.
--Dean Baker
