July 2 (Bloomberg) -- Consumers fell behind on loans secured by their homes at the fastest pace in two decades in the first quarter, signaling deeper distress in the U.S. economy, the American Bankers Association reported.

Home-equity lines of credit at least 30 days past due rose 14 basis points to 1.1 percent of accounts in the quarter, the Washington-based group said today in a statement. Delinquent credit-card accounts increased 13 basis points to 4.51 percent, the highest since 2006. Late rates worsened in five of eight categories of non-revolving loans tracked by the group.

``It's all bad news because people who had spending plans based on credit will have to cut back,'' said Nigel Gault, research director at Lexington, Massachusetts-based Global Insight Inc. ``People overstretched to take advantage of equity in their homes, equity which may not be there anymore.''

Consumers squeezed by higher food and fuel prices are tapping revolving credit lines to stay afloat as the economy slows. The U.S. lost 49,000 jobs in May, the fifth straight monthly decline, and the unemployment rate rose to 5.5 percent, the biggest jump in than two decades.

The rise in delinquent home-equity accounts was the biggest since the ABA began collecting data in 1987, said spokeswoman Carol Kaplan. It also was the highest in 11 years. Delinquencies often don't peak until late in an economic slowdown.

Americans had $625 billion in home-equity credit lines in the first quarter, according to the Federal Deposit Insurance Corp. Growth in the loans has slowed in the past two years after rising to $559 billion in 2006 during the housing boom from $184 billion in 2001.

Loan Delinquencies

Mobile-home loan delinquencies jumped 30 basis points to 3.22 percent in the quarter, the ABA said. Overdue accounts rose by 2 basis points to 1.92 percent for auto loans made by banks, by 3 basis points to 1.11 percent for recreational vehicle loans, by 18 basis points to 1.75 percent for boat loans and by 7 basis points to 2.55 percent for personal loans.

The overall composite index tracking the non-revolving loan delinquencies fell 3 basis points to 2.62 percent as payments improved for auto loans made at dealerships, which make up the bulk of the index. A basis point is 0.01 percentage point.

ABA chief economist James Chessen said in the statement that because of job losses, slow income growth and falling real estate and equity markets, there is ``little relief'' in the coming months.

``There's a lot of pressure on pocketbooks for consumers and I don't see delinquencies going down in the near future,'' Chessen said today in a Bloomberg Television interview.

Consumer Confidence

Home-equity credit lines differ from home-equity loans in that the borrower isn't advanced the entire sum up front. Like credit cards, minimum monthly payments on borrowed money are required and the interest rate is variable.

Chessen said studies show that about a third of home-equity borrowers use the money for property improvements, a third for purchases or to pay off other debt and a third for making investments.

``The average consumer is tapped out and burned out,'' billionaire investor Wilbur Ross said yesterday in a Bloomberg Television interview. ``They kind of used their house as an ATM machine with a couple bedrooms attached to it.''

Confidence among U.S. consumers fell to the lowest since May 1980 in June, according to the Reuters/University of Michigan final index. Consumer spending accounts for more than two-thirds of the U.S. economy.

Gasoline

The national average pump price for regular gasoline last week was $4.06 a gallon, up 36 percent from a year earlier, MasterCard Inc. said yesterday in its SpendingPulse report.

American Express Co. Chief Executive Officer Kenneth Chenault said last week that credit indicators including late payments worsened beyond the company's expectations in June. New York-based American Express is the biggest U.S. credit-card company by purchase volume.

American Express, Capital One Financial Corp. and Discover Financial Services shares have dropped by more than a third in the past year on concern that late payments and loan losses will be worse than the lenders expect.

To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net

Last Updated: July 2, 2008 15:42 EDT