The first mortgage default rate increased four basis points from December to January, starting the year at 0.72 percent, according to the latest data from the S&P/Experian Consumer Credit Default Indices
. On a year-over-year-basis, the default rate was unchanged.
The composite rate for January saw a four-basis-point increase during January to 0.95 percent, which was primarily fueled by the 13-basis-point spike in the bank card default rate to 3.57 percent, which is nearly a four-year high. The auto loan default rate fell three basis points from December to 1.07 percent. The January data stopped covering second mortgage default rates.
“The economy is growing, consumers are bullish and they’re spending money,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Home mortgage rates, which respond to movements in the financial markets, have risen from four percent to about 4.4 percent since the beginning of 2018. Although interest rates have increased, there are few signs of financial tightness or increased difficulties in qualifying for loans. Rates on bank cards tend to be more stable but higher than mortgage or auto loan rates.”