Credit Default Rates Increase in October: S&P/Experian

Secondary

Print

Email

Reprints

Comment

Twitter

LinkedIn

Facebook

Google+

Consumer credit default rates rose slightly in October from the previous month. But even with the recent increases, these rates are still much lower than levels seen a year ago.

The SP Dow Jones/Experian national composite posted 1.06% in October, which is up two basis points from a month earlier. Last October, the national composite index was 1.38%.

First mortgage defaults increased for the third consecutive month. Through October, the default rate was 0.96%, three basis points higher than September but down 34 basis points year over year.

Meanwhile, the second mortgage default rate declined five basis points month over month, to 0.47%. A year earlier, the second mortgage default rate was 0.72%.

For the fourth straight month, bank card defaults fell declining by three basis points, to 2.6%. The default rate was 2.97% in October 2013.

“Despite the small increases in default rates, bank card and second mortgage default rates are currently at historical lows,” said David Blitzer, managing director and chairman of the index committee for SP Dow Jones Indices.

Auto loan default rates jumped four basis points, to 1.05%. This index had the lowest year-over-year drop, down only nine basis points.

“The continued six-month upward trend in auto loan default rates does coincide with strong automobile sales over the same period,” Blitzer said.

Additionally, three of the five cities SP/Experian tracks saw its default rates post increases in October. Dallas, Los Angeles and Miami were respectively at 0.98%, 0.84% and 1.26%. Compared to September, Dallas was up 19 basis points, while Los Angeles rose by seven basis points and Miami experienced a five basis point increase.

New York posted a consumer credit default rate decrease for the third straight month to a historical low of 0.99%. Lastly, Chicago improved two basis points month over month, to 1.12%.

Leave a Reply