On August 21st S&P Dow Jones Indices and Experian released July 2012 data for the S&P/Experian Consumer Credit Default Indices, which measure consumer credit default rates. July data showed a small decline in the composite index, while first mortgage default rate were unchanged and second mortgage default rates rose by two basis points. The national composite declined to 1.51% in July from June’s 1.52% rate, the first mortgage default rate maintained June’s 1.41% and the second mortgage rates rose from 0.73% in June to 0.75% in July.
Four of the five loan types posted their lowest rates since the end of the 2007/2009 recession, only second mortgage increased marginally from 0.73% in June to 0.75% in July. However, June’s rate for second mortgages was the lowest in its eight year history.
Miami and New York saw their default rates drop and reach post-recession lows. Chicago’s rate did not change, but maintained a recent low. Dallas and Los Angeles’ default rates rose in July.
As seen in the graph above, consumer default rates are below their pre-crisis rates, with the first mortgage and composite rates around those last witnessed in late 2006, and the second mortgage rates are near their eight-year historic low. Consumer credit quality continues to improve.