The percentage of late mortgage payments registered in the first quarter was the lowest in nearly five years as an improving job market and good economic conditions took pressure off household budgets.

The seasonally adjusted percentage of mortgage payments that were 30 or more days past due for all home loans surveyed dropped to 4.31 percent in the January-to-March quarter, the Mortgage Bankers Association (search) reported Tuesday. That was down from 4.38 percent in the fourth quarter and was the lowest since the second quarter of 2000, when the delinquency rate stood at 4.11 percent.

The association's quarterly survey covers nearly 39.4 million mortgage loans.

The seasonally adjusted percentage of mortgages that started the foreclosure process in the first quarter also fell to 0.42 percent, compared with 0.46 percent in the final quarter of 2004.

Doug Duncan, the association's chief economist, attributed the improvements to the generally good economic climate, which can help households better their financial positions and obligations.

Payroll growth in the first three months of this year averaged 182,000, up from an average of around 140,000 in the prior quarter. The economy, meanwhile, grew at a respectable pace of 3.5 percent in the first quarter.

Those factors "combined with the low interest rate environment, consumers improved their household finances and the percentage of home owners making their mortgage payments on time increased to nearly 96 percent," said Duncan.

The association's survey included a new measure: "seriously delinquent" loans. Those are loans where payments are 90 or more days past due or loans that are in the foreclosure process. The percentage of these loans came in at 1.89 percent in the first quarter, down from 2.07 percent in the fourth quarter. This new gauge is not seasonally adjusted.

The hot housing market, stoked by low mortgage rates, has registered four straight years of record-high sales.

But speculative home buying, surging home prices and renewed interest in risky mortgages such as interest-only loans (search) are drawing concerns from Federal Reserve (search) Chairman Alan Greenspan and others.

There's a tendency for people to stretch financially to buy a house they have fallen in love with, Duncan said. But prospective home owners need to make certain they are taking on an obligation that they can handle. They need to "make a concrete financial decision as opposed to an emotional decision," he said.