by Calculated Risk on 9/28/2005 11:28:00 AM

UPDATE: on credit cards, the Post has an explanation of how payments will increase (its not a hard and fast rule): We'll Have to Pay More. Good! (Thanks to Shawn for link)

The Mortgage Bankers Association reports:

The Market Composite Index — a measure of mortgage loan application volume – was 721.2, a decrease of 6.6 percent on a seasonally adjusted basis from 772.2 one week earlier. On an unadjusted basis, the Index decreased 7.1 percent compared with the previous week and was down 0.5 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index decreased by 3.4 percent to 483.1 from 500.3 the previous week whereas the Refinance Index decreased by 10.5 percent to 2106.6 from 2353.7 one week earlier.

And the American Bankers Association reported:

... the seasonally adjusted percentage of credit card accounts 30 or more days past due rose in the April-to-June quarter to 4.81 percent. That followed a delinquency rate of 4.76 percent in the first quarter and was the highest since the association began collecting this information in 1973.

The rise in late payments was blamed on the increase in gas prices:

The rise in gas prices is really stretching budgets to the breaking point for some people," the association's chief economist, Jim Chessen, said in an interview. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations."

And the situation will probably get worse since the minimum credit card payment is set to rise on Oct 1st (hat tip to Paul Williamson at Property Economics):

Next month, people who have held a credit card for some time should get a surprise: each month, they will have to pay 4 percent of the outstanding balance on the card, not 2 percent. This move was dictated by the federal government's comptroller of the currency in 2003. The phase-in for new customers began in the summer, and October is the big month for existing customers. It's not small change. Almost 40 percent of credit-card holders pay only the minimum balance, according to Cardweb.com.

The average household credit-card balance is around $9000, according to Boston's Babson Capital. Previously, families paid a minimum of $180 a month. Now, they will have to pay $360 each month.

A housing slowdown, less equity extraction, rising gasoline bills, rising late payments ... not a good combination.