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First mortgage default rates decline by more than one-quarter of a percentage point in May
On June 19th, S&P Indices and Experian released May 2012 data for the S&P/Experian Consumer Credit Default Indices, which measure consumer credit default rates. May data showed a decline in the composite index, led by a 26 basis point drop in first mortgage default rates. Second mortgage default rates fell by 6 basis points over the month. The national composite declined to 1.62% in May from April’s 1.86% rate, the first mortgage default rate decreased from April’s 1.76% to May’s 1.50% and the second mortgage rates declined from 0.93% in April to 0.88% in May.
Once again, with May’s data first and second mortgage, auto and composite default rates all reached post-recession lows. All of the five cities we cover saw their default rates drop, and all five are at post-recession lows.
As seen in the graph below, consumer default rates are close to or below their pre-crisis rates, with the first mortgage and composite rates around those last witnessed in the spring of 2007, and the second mortgage rates back to the summer of 2005 levels. Consumer credit quality continues to improve.
Read more at Standard & Poor’s HousingViews
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