Data through February 2014, released by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices showed decline in national default rates during the month. All of the five national indices showed a drop-off for the month of February. The national composite posted 1.30 percent in February, its lowest rate since August 2006. The first mortgage default rate was 1.23 percent in February, down from 1.26 percent last month. The second mortgage posted 0.69 percent in February, down from 0.72 percent in January. The auto loan default rate was 1.03 percent in February, down from 1.11 percent in the previous month.
The bank card rate of 2.83 percent is a new historic low beating out the previous low of 2.97 percent set in October 2013. “Despite some mixed economic reports and severe weather, consumer credit default rates continue to decline” says David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices.
Across all categories default rates improved. Other data confirm the improving trends. Retail sales revived in February, purchase of services rose 0.9 percent, the largest jump in over 10 years and personal income is resilient as incomes rose by 0.3 percent. Consumer default rates have stabilized at levels similar to those seen before the financial crisis.
“Four out of the five cities saw default rate decreases. Dallas was the only city to see an increase in default rates; it posted 1.16 percent, two basis points higher than last month’s level. Miami recorded the largest downturn; it posted 2.23 percent, 38 basis points lower than January’s level. Los Angeles continued its downwards trend, recording 1.05 percent, the lowest default rate seen since July 2006. Miami maintained the highest default rate and Los Angeles had the lowest. Four cities – Chicago, Dallas, Los Angeles and Miami - remain below default rates they posted a year ago, in February 2013.”