Data from Standard & Poor’s and Experian’s indices revealed that U.S. consumer credit default rates, led primarily by mortgage defaults, increased for the third straight month to 1.72 percent in December.
After credit default rates reached a post-recession low of 1.46 percent in September, credit defaults increased by 1.55 percent in October and 1.64 percent in November. Mortgage default rates posted similar numbers, with a post-recession low of 1.36 percent in September, 1.47 percent in October and 1.58 percent in November before reaching 1.68 percent in December.
Bank card default rates posted the lowest post-recession rate of 3.53 percent in December, a slight decrease from 3.58 percent in November, and second mortgage default rates rose seven basis points to 0.69 percent from November’s historic low of 0.62 percent.
“Overall, 2012 showed improvement in consumer credit quality,” David M. Blitzer, the managing director and chairman of the Index Committee for S&P Dow Jones Indices, said. “However, fourth quarter consumer default rates reversed some of the recent declines and pushed the composite default rate above its level of last May. The principal culprits were first and second mortgages. Default Rates for auto loans were roughly stable over the year, and default rates for bank cards continued to drop. All loan types remain below their respective levels a year ago.”
Of the five cities covered by the indices, Dallas saw the lowest credit-default rate at 1.26 percent in December, compared to 1.51 percent in New York, 2.12 percent in Chicago, 1.84 percent in Los Angeles and 3.07 percent in Miami.