Mortgage Default Rates Up Slightly in August
Default rates on first and second mortgages took a slight increase last month, according to new data released by the S&P/Experian Consumer Credit Default Indices.
The default rate on first mortgages was at a 0.68 percent rate in August, up from 0.66 percent in July, while the second mortgage default rate inched up from 0.44 percent in July to 0.52 percent in August. However, both were well below their August 2015 levels—0.84 percent for first mortgages and 0.57 for second mortgages. The composite rate for all consumer credit categories was 0.85 percent in August, up from 0.83 percent one month earlier.
David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, saw no reason to be upset by these numbers. “Despite small monthly movements in consumer credit defaults, the overall default rates are stable and close to the lowest levels since shortly before the financial crisis,” he said, adding that “mortgage loan defaults are 16 basis points lower” compared to a year earlier and that the “overall consumer credit picture gives little reason to be concerned about default rates.”
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