Mortgage Default Rates Up Slightly in September

Default rates on first and second mortgages increased from August to December, according to new data from the S&P/Experian Consumer Credit Default Indices.

 

The first mortgage default rate increased one basis point to reach 0.66 percent in September; the rate is one basis point below the September 2016 level. The second mortgage default rate increased from 0.50 percent in August to 0.53 percent in September, yet it is lower than the 0.56 percent level from one year earlier. The composite consumer default rate that covers mortgages along with bank card and auto loan activity moved from 0.86 percent in August to 0.88 percent in September; the composite rate was 0.84 one year ago.

 

“While the composite consumer credit default rate eased higher in the last three months, it is even with the level of one year ago,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Looking at the components, we see that moves among mortgages, bank cards and autos have tended to offset one another over the past year. As a result, no sector is currently showing substantial increases or signs that consumers are facing renewed financial stress. Other economic indicators through the summer echo consumers’ favorable condition: debt service as a proportion of income is modest while consumer credit and mortgage borrowing continues to see moderate expansion.”

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