Consumer credit default rates close to 12 year low
The first mortgage default rate reported was 0.66% in July, up one basis point from the prior month. Auto loan defaults recorded a 0.93% default rate, up two basis points from June. The bank card default rate came in at 2.92% down 19 basis points from last month.
Four of the five major cities saw their overall default rates decrease during the month of July. Chicago recorded a default rate of 0.89%, down 12 basis points for the month. New York reported a default rate of 0.77%, down six basis points from June.
Dallas's default rate decreased five basis points from the prior month, posting a default rate of 0.69%. Los Angeles reported a default rate of 0.63%, down four basis points for July.
Miami's default rate increased for the fifth consecutive month, up six basis points with a default rate of 1.37%.
"Consumer credit default rates remain close to 12 year lows amidst moderate growth in spending and incomes," says David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
"The consumer economy is growing with few significant difficulties in accessing credit. Personal incomes rose 2.7% in the last year and retail sales, excluding autos, were up 2.3% in the year to July.
"Employment is increasing, median wage growth, as reported by the Atlanta Federal Reserve Bank, is 3.6% at annual rates, and consumer sentiment continues at high levels. Consumers' use of debt has expanded with both consumer credit and mortgage debt balances rising." ■