Mortgage delinquencies in December increased to 2.24 percent of all mortgages, a slight increase from the month before when delinquencies were at 2.22 percent but a decrease of over 25 percent from a year ago when the rate was 3.01 percent. The mortgage delinquency rate is something I pay close attention to because it is the “leading indicator” of foreclosures and foreclosures and REO’s are one of the major hurdles to a recovery in the housing market. Declining delinquency rates are our first clue that the housing market is headed to a recovery.
We’re not out of the woods yet…
“Led by the mortgage markets, the second half of 2011 saw a slight reversal of the two-year downward trend in consumer credit default rates,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. “First mortgage default rates rose for the fourth consecutive month, as did the composite. Since August, first mortgage default rates have risen from 1.92% to the 2.19%. The composite also rose those months, from 2.04% to 2.24%. The recent weakness seen in home prices is reflected in these data.
| S&P/Experian Consumer Credit Default Indices | |||
| National Indices | |||
| Index | December 2011 Index Level | November 2011 Index Level | December 2010 Index Level |
| Composite | 2.24 | 2.22 | 3.01 |
| First Mortgage | 2.19 | 2.17 | 2.93 |
| Second Mortgage | 1.33 | 1.26 | 1.74 |
| Bank Card | 4.60 | 4.91 | 6.73 |
| Auto Loans | 1.27 | 1.17 | 1.69 |
| Source: S&P/Experian Consumer Credit Default Indices | |||
| Data through December 2011 | |||
The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:
| Metropolitan Statistical Area | December 2011 Index Level | November 2011 Index Level | December 2010 Index Level |
| New York | 2.13 | 2.21 | 3.01 |
| Chicago | 2.84 | 2.84 | 3.14 |
| Dallas | 1.56 | 1.38 | 2.21 |
| Los Angeles | 2.54 | 2.53 | 3.07 |
| Miami | 4.73 | 4.47 | 10.15 |
| Source: S&P/Experian Consumer Credit Default Indices | |||
| Data through December 2011 | |||
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