S&P Indices and Experian today released September data for the S&P/Experian Consumer Credit Default Indices, which measure changes in consumer credit defaults; and the data showed increases in default rates across most consumer credit lines. First mortgage default rates rose from 1.92% in August to 1.99% in September and second mortgage default rates rose from 1.27% to 1.32% over the same period. This is the first time we have seen an increase in first mortgage default rates since November 2010.
While these data are only for one month, we have not seen so many increases in default rates in a year or more, and more recent data on both consumer confidence and the economy in general are good reasons to watch these data over the next few months. Since about April 2009, consumer credit default rates have been declining across both loan types and regions. September’s report was the first time we saw increases in four of five regions, three of four loan types and the composite, which rose from 2.04% to 2.10%.