Data through June 2011, released by S&P Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a measure of changes in consumer credit defaults, showed first and second mortgages default rates decreased in June to 2.02 percent and 1.40 percent, respectively, from May rates of 2.09 percent and 1.42 percent. Auto loans default rate went down from 1.34 percent in May to 1.29 percent in June; and bank cards experienced the largest decrease in June from 5.93 percent to 5.69 percent.
“Default rates are continuing to decline across major consumer credit categories,” says David M. Blitzer, managing director and chairman of the Index Committee for S&P Indices. “More importantly for the economy, the Federal Reserve reported that revolving credit— which includes bank cards—rose in May for the first time since 2008. Combined with the improving default experience we are seeing this is a positive sign for an economy suffering from a lack of consumer spending. Looking at the five leading cities highlighted in this report, the lingering effects of the housing bust can be seen in the Miami where default rates remain higher than the other cities.”
Consumer credit defaults varied across major cities in the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Chicago experienced a large increase in default rates, from 2.37 percent in May to 2.59 percent in June. Dallas and Miami increased moderately to 1.59 percent and 5.41 percent, from 1.58 percent and 5.31 percent. New York and Los Angeles saw default rates decrease to 1.82 percent and 2.17 percent in June, from 1.94 percent and 2.39 percent in May, respectively.The table below summarizes the June 2011 results for the S&P/Experian Credit Default Indices.
The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs: