The default rate on first mortgages fell from 0.75 percent in March to 0.69 percent in April; on a year-over-year basis, the default rate was unchanged. The second mortgage default rate fell from 0.57 percent in March to 0.51 percent in April, and it was also seven basis points lower than the April 2016 level.
The composite rate for consumer defaults dropped four basis points to April’s 0.90 percent level. However, the bank card default rate increased four basis points from March to 3.35 percent last month.
“Default rates on first mortgages are steady as home prices continue to rise in most parts of the country and sales of both new and existing homes increase,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “The Fed survey reported little change in either demand for mortgage loans or mortgage lending standards. The level of outstanding mortgage debt bottomed in the second quarter of 2014 and has been increasing steadily since then. After almost three years, outstanding mortgage debt is nine percent below the peak seen in the first quarter of 2008. Some analysts question if continuing increases in home prices presage a new housing bubble. Given conditions in the mortgage markets, this is not a current concern.”
Separately, the Mortgage Bankers Association
reported that the delinquency rate for mortgage loans on one- to four-unit residential properties decreased to a seasonally adjusted rate of 4.71 percent of all loans outstanding at the end of the first quarter. The delinquency rate was down nine basis points from the previous quarter, and was six basis points lower than one year ago. The serious delinquency rate was 2.76 percent, a decrease of 37 basis points from last quarter, and a decrease of 53 basis points from last year.