The rate of consumer credit default in the U.S. inched slightly upward in September, and the mortgage default rate also marginally increased, according to the September 2014 S&P/Experian Consumer Credit Default Indices released earlier this week.
For consumer credit default, the national composite posted 1.04 percent in September, which is an increase of three basis points after hitting a historical low point just two months earlier in July.
Meanwhile, mortgage default rates increased for the second consecutive month in September, rising to 0.93 percent. The second mortgage default rate saw its first increase since April 2014, rising by one basis point up to 0.52 percent.
While consumer credit and mortgage default rates saw in increase, the bank card default rate declined for the third straight month in September, falling by 10 basis points down to 2.63 percent.
“Default rates for bank cards reversed an increase seen in the first half of 2014 while defaults on first mortgages and auto loans appear to have bottomed out over the summer. However, none of these movements are very large,” said David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices. “Despite their slight increase, default rates are still near the lows seen before the 2007-09 recession and financial crisis."
The index indicated that five major U.S. metropolitan areas – Chicago, Dallas, Los Angeles, Miami, and New York – all reported default rates in September 2014 than in September 2013. New York's reported default rate of 1.05 percent was its lowest since September 2005, and Miami's rate of 1.21 percent was that city's lowest since June 2006, according to the index. Los Angeles's September rate of 0.77 percent is up 11 bases points after falling to a historical low in July 2014.