As the financial grim reaper starts appearing in counties once overflowing with oil and gas jobs, he will probably take cars before homes.
Auto loan defaults are on the rise in the counties with the highest concentration of oil and gas jobs, but mortgage delinquencies, so far, are holding steady, according to a .
Researchers Andrew Haughwout, Donghoon Lee, Joelle Scally and Wilbert van der Klauuw separated out the U.S. counties where oil and gas production accounted for 6 percent or more of jobs in a first-of-its-kind study. The concentration of oil and gas production jobs averages about 0.6 percent nationwide.
In Colorado, the counties with a disproportionate number of oil and gas jobs were Cheyenne, Clear Creek, Delta, Gunnison, Hinsdale, Jackson, Rio Blanco, Teller and Yuma.
The share of mortgages 90 days or more behind in the petroleum-dependent counties was running at 1.8 percent in the first quarter, right where it was in the second quarter of 2014, before oil prices began their sharp descent. That share is also below the 2 percent mortgage delinquency rate measured nationally. The analysis doesn’t break out delinquencies by state.
Auto loans tell a different story. Petroleum-dependent counties are seeing severe delinquencies, running 4.6 percent versus a 3.4 percent rate nationally. Back in June 2014, the auto loan delinquency rate in the oil patch was 3.2 percent.
Before 2006, home and auto loans in oil-heavy counties increased in line with the U.S. average, before a boom in horizontal drilling caused them to surge at a much faster pace.
The first three months of 2016, however, marked the first time since 2011 that the dollar value of auto loans shrunk in petroleum-dependent counties.
“While these effects are relevant in these counties, itap important to remember that the affected areas are quite small relative to the nation,” the N.Y. Fed economists noted in their study.
