First Mortgage Default Rate Inches Up in July

National default rates inched up in July, with first mortgages showing a slight increase, according to the ""S&P/Experian Consumer Credit Default Indices"":http://www.spindices.com/indices/specialty/sp-experian-consumer-credit-default-composite-index.

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The national composite for consumer defaults--which cover first and second mortgages, bank cards, and auto loans--ticked up to 1.35 percent in July from 1.34 percent in June.

For the first time this year, the default rate for first mortgages increased. In July, the default rate was 1.25 percent, up slightly from 1.23 percent in June. The first mortgage default rate though is still down compared to July 2012, when it was 1.41 percent.

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The second mortgage default rate fell flat at 0.54 percent, but was down from 0.75 percent a year ago.

The default rate for bank cards was the only category to show a decrease, falling to 3.22 percent from 3.41 percent in June.

Even with the increases, David M. Blitzer, managing director and chairman of the index committee at S&P, pointed to the bigger picture.

""Consumer credit quality remains healthy,"" said Blitzer. ""The first mortgage was 1.25% in July, only two basis points up from its recent low posted last month. Across all other categories default rates remain at or marginally above their historic lows. The second mortgage default rate remained flat at a new low of 0.54% reached last month.""

The indices also showed an increase in default rates for all five large cities tracked--New York, Chicago, Dallas, Los Angeles, and Miami.

""Miami increased the most; it posted 2.06%, 31 basis points up from last month. Chicago recorded 1.75%, 16 basis points above the last month's level. New York increased by nine basis points, Dallas by five and Los Angeles by three basis points. All five cities remain below default rates they posted a year ago, in July 2012.""