As companies in the energy sector have laid off workers, people from Oklahoma and Texas to North Dakota and Wyoming are struggling to pay bills, reports The Wall Street Journal's Annamaria Andriotis. (Subscription required.)
Overall, energy-dependent states are posting delinquency rates that in many cases exceed the national average, according to data prepared for The Wall Street Journal by credit bureau TransUnion.
“In these energy states, we are clearly seeing the impact of the loss of oil jobs,” said Ezra Becker, senior vice president and head of research at TransUnion. “We don’t expect to see any kind of material improvement in the short term.”
Mortages payments usually aren't the first thing to go when workers are unemployed and that is holding true in the oil patch.
Car loans and credit cards have been affected the most, and there are some early signs of delinquency-rate increases in borrowers who can’t make mortgage payments. Moody’s Investors Service said the share of borrowers in oil-focused areas falling 30 days behind on a pool of Freddie Mac mortgages, while low at 0.38% in December, began to exceed the average elsewhere in the country last summer. The average for other areas was 0.29% in December.
A Freddie Mac spokesman said the company doesn’t publicly report 30-day delinquencies, but said its national delinquency rate for mortgages that are 90 days or more past due has been on a steady downward trend.