As the unemployment rate and other economic measures continue to improve, American consumers appear to be gaining a greater ability to meet their credit obligations.
A report released  Tuesday by S&P Dow Jones Indices and Experian showed a decline in default rates among five of the largest cities in the nation to historically low levels.
The national composite for all types of credit default posted 1.02% in June, its lowest reading since the organization began collecting the data ten years ago.
Consistent with recent reports that payment priorities may be shifting  among Americans back to pre-downturn norms, mortgages lead the way with first mortgages clocking in at just 0.89 percent default. The default rate at second mortgages was even lower at 0.57 percent.
"Consumer credit default rates continue to drift lower and have reached a historical low," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices.
"Recent economic reports are encouraging with the unemployment rate now at a six year low and strong job creation in recent months. The continued declines in consumer default rates confirm other indicators of an improving economy. Credit standards for mortgage loans continue to be somewhat restrictive and may be contributing to low first mortgage default rates”.
Of the large metropolitan areas surveyed, Dallas, Texas was the only city to actually see a rise in default levels. However, the slight increase comes on the heels of the city’s lowest rate of default recorded in the history of the survey the previous month.
Concerns about the direction of the economy and the effect that is has on the credit market are not unfounded but even as the housing recovery slows, the lack of significant default in the market can only be seen as a positive indicator.