Fewer consumers defaulted on their first mortgages in August compared to the previous month, but the same positive news did not occur for second mortgages.
According to data released by S&P Dow Jones Indices and Experian, the consumer credit default rate for first mortgages reached a new low in August, down to 1.23%. This is a two basis point decrease from July and a drop of 17 basis points from a year ago when the rate was 1.4%.
Meanwhile, the second mortgage default rate posted a 0.57% mark in August, up from the 0.54% July rate, which was its lowest mark. Even though second mortgage defaults increased on a monthly basis, they were still down from August 2012 when the rate was 0.72%.
Overall, the national credit default indice was 1.34% in August, marginally down from 1.35%
Also, S&P/Experian reported a month-over-month increase in auto loan defaults. The rate is now at 1.11%, which is an uptick of eight basis points.
But bank card defaults fell by 10 basis points from July to August with a mark of 3.12%, representing a new low. Compared to a year ago, this latest monthly figure is down 65 basis points.
“Consumer credit quality continues to look healthy,” said David Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices. “The indices are back to prefinancial crisis levels and are stable.”
For the five metropolitan statistical areas analyzed by S&P/Experian, two cities—New York and Los Angeles—saw their default rates drop in August while Chicago, Dallas and Miami experienced increases. Blitzer noted that all five cities still remain below default rates they posted a year ago.
As of August, New York’s consumer credit default rate is 1.21%, Los Angeles is 1.44%, Chicago has a 1.83% rate, Dallas is at 1.13% and Miami is 2.19%.
