A report released this morning by Standard & Poor’s and Experian show a decrease in monthly default rates on first mortgages from 2.02 percent to 1.93 percent and a decrease in default rates on second mortgages from 1.40 percent to 1.25 percent in July. A continuing decline in mortgage delinquencies is one of the things we need to help move the real estate market into a recovery. As the delinquencies come down, so do the foreclosures eventually back to a point where they are not negatively impacting home prices to the extent they are presently.
David M. Blitzer, Managing Director and Chairman of the Index Committee, said “by and large, July’s data support the downward trend we have observed over the past two years. Despite high unemployment rates, consumers continue to improve their financial positions, resulting in lower default rates than we were seeing during the recession.”
Consumer credit defaults varied across major cities in the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Dallas experienced a small increase in default rates, from 1.59% in June to 1.60% in July. Los Angeles and Miami decreased moderately to 2.15% and 5.37%, respectively from 2.17% and 5.41%. New York and Chicago saw default rates decrease to 1.80% and 2.54% in July, from 1.82% and 2.59% in June, respectively.
The table below summarizes the July 2011 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.
|
S&P/Experian Consumer Credit Default Indices National Indices |
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| Index |
July 2011 Index Level |
June 2011 Index Levels |
July 2010 Index Levels |
| Composite |
2.06 |
2.14 |
3.42 |
| First Mortgage |
1.93 |
2.02 |
3.24 |
| Second Mortgage |
1.25 |
1.40 |
2.77 |
| Bank Card |
5.64 |
5.69 |
8.20 |
| Auto Loans |
1.27 |
1.29 |
1.96 |
Source: S&P/Experian Consumer Credit Default Indices -Data through July 2011
The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:
| Metropolitan Statistical Area |
July 2011 Index Level |
June 2011 Index Levels |
July 2010 Index Levels |
| New York |
1.80 |
1.82 |
3.71 |
| Chicago |
2.54 |
2.59 |
3.75 |
| Dallas |
1.60 |
1.59 |
2.45 |
| Los Angeles |
2.15 |
2.17 |
4.58 |
| Miami |
5.37 |
5.41 |
8.92 |
Source: S&P/Experian Consumer Credit Default Indices -Data through July 2011
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