Loan default rates increased for the fifth consecutive month in December, according to the S&P/Experian consumer credit default indices.
The national composite posted a default rate of 1.11% in December, up four basis points from the previous month.
First and second mortgage default rates both worsened month over month, respectively, by five and 11 basis points, to 1.02% and .59%. This was the largest default increase for first mortgages since September 2013, S&P/Experian said.
Meanwhile, the bank card default rate also was six basis points higher from its historic low in November, to 2.65%.
The only sector to see default rates decrease in December compared to the month before was auto loans, down three basis points, to 1.02%.
"While the economy is strengthening and consumer spending is gaining, wages have shown little growth," said David Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices. "The large drop in oil prices benefits consumers' disposable income and should limit consumers' financial stress. Default rates remain very low but could be a cause for concern if the rising trend gains strength."
Chicago, Dallas, New York, and Los Angeles reported December default rates of 1.16%, 1.08%, 1.05%, and 0.86%, respectively. All of these figures are higher than the month before, with Blitzer citing "holiday shopping and delayed payments" for the larger than normal increases. Miami was the lone city where default rates fell in December from November, down 12 basis points, to 1.34%.
However, S&P/Experian said that all five cities still remain below rates seen a year ago.
