First Mortgage Default Rate at One-Year High
April 18, 2017
The first mortgage default rate increased by a scant one basis point from February to March, according to the latest S&P/Experian Consumer Credit Default Indices data. However, the 0.75 percent level reached in March took the first mortgage default rate to a one-year high.
The second mortgage default rate was also up, rising from 0.51 percent in February to 0.57 percent in March. The composite rate for consumer defaults was unchanged from February to March at 0.94 percent.
David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, was not concerned over the latest data.
“The continuing low consumer credit default rate reflects recent strong job growth and a favorable economy,” Blitzer said. “The economy is also supporting consumers’ positive outlook and strong sentiment about the economy and their financial condition. Data from the Federal Reserve shows that consumer credit continues to expand at more than six per year, the highest pace since 2007-2008. Other Federal Reserve data indicate that household net worth in 2015 and 2016 rose 2.3 percent each year.”
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