Drop in Defaults Continues to Improve Credit
The S&P/Experian Consumer Credit Default Indices reiterate recent decreases in first-mortgage default rates are contributing to continuous improvements in the financial condition of most U.S. consumers.
Data indicate customer defaults hit a post-recession low of 1.42% in April, down from 1.5% in March, while the national first-mortgage default rate dropped to 1.31%, down 10 percentage points from the 1.41% rate reported in March.
David Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices, credited the progress to improvements in the economy and declining consumer debt that suggest “the recession is definitely behind us,” despite still-high unemployment rates.
New York, Chicago, Dallas, Los Angeles and Miami saw lower default rates in April compared to last year.
Chicago, Los Angeles and Miami hit new post-recession lows, with the Dallas default rate reaching its lowest among the five cities at 1%.
Miami had the highest default rate at 2.21% despite a 0.72 percentage point decrease, compared to March and a 1% decline since February 2013.
In Dallas the default rate dropped 20 percentage points, in Chicago 14 percentage points and Los Angeles 12 percentage points, while in New York it dropped only 1 percentage point.
The second-mortgage default index also decreased, down 7 percentage points to 0.62 in April, compared to 0.69 in March and 0.93 in April 2012.