Consumer credit defaults increased during June, according to data from the S&P Dow Jones Indices and consumer credit reporting agency Experian.
The composite default rate rose five basis points — to 0.93% — from the previous month. First mortgage defaults were 0.80%, up six basis points from an historical low set in May, while second mortgage default rates rose 13 basis points to 0.55%. However auto loans hit the lowest default rate for the asset-class since the indices began measuring default rates, measuring at 0.85%. Bank card default rates dropped month-over-month by 10 basis points, to 2.88%.
"This report, and the economy's overall condition, both look a lot like last month," said S&P Dow Jones Indices managing director and chairman of the index committee David Blitzer in a release. "The economy continues to expand at a modest pace, helped by the 5.3% unemployment rate, a continued low rate of initial unemployment claims, and recent improvements in housing starts."
"All of these factors should continue to support the current low rate of consumer credit defaults," Blizter continued, though he warned that oil price volatility, Greece's potential impact on financial markets, and China's stock market plunge could all drag on the economy, which could in turn impact consumer default rates.
