On September 18th S&P Dow Jones Indices and Experian released August 2012 data for the S&P/Experian Consumer Credit Default Indices, which measure consumer credit default rates. August data showed declines in the composite, first mortgage and second mortgage default rates. The national composite declined to 1.50% in August from July’s 1.51% rate, the first mortgage default rate fell from 1.41% to 1.40% and the second mortgage rate fell from 0.75% in July to 0.72% in August, the lowest in its eight year history
Four of the five loan types posted their lowest rates since the end of the 2007/2009 recession. Only auto loan rates increased marginally in August, but this was from July’s eight year historic low.
Los Angeles was the only city where the default rates fell in August; 1.60% is a post-recession low for that city. New York remained flat at its 1.49% post-recession low. Miami’s default rate rose from July’s post-recession low. Dallas’ and Chicago’s rates also rose in August.
As seen in the graph above, consumer default rates have fallen well below what was witnessed during the housing crisis, with the first mortgage and composite rates around those last seen in late 2006, and the second mortgage rate is at its eight-year historic low. a good sign for the housing recovery.