A leading index on debt defaults dropped for the seventh straight month, an indicator that Americans are being more vigilant about paying down car loans, mortgages and credit cards.
Four of the five loan types monitored by credit reporting agency Experian and the S&P Dow Jones Indices fell in July to the lowest level since the recent financial collapse, though second mortgages did see a slight increase from numbers reported in June, the Los Angeles Times reports.
“Looking at the rate of new defaults in mortgages or auto loans, the consumers’ credit position has recovered from the financial crisis,” David M. Blitzer, the chair of the Index Committee for S&P Dow Jones Indices, said, according to the Los Angeles Times. “However, other data show that previously defaulted mortgages remain an issue and many consumers still face an overhang from old debts.”
Credit card defaults fell to their lowest level since August 2007, the largest improvement in July.
Improvement in default rates, however, was significantly slower than earlier in the year. The composite default index fell 0.01 points from June and 0.55 points from one year earlier, the Los Angeles Times reports.
Of the five major U.S. markets, default rates rose in Los Angeles and Dallas while rates fell in New York and Miami. Default rates in Chicago remained flat.