New data from the S&P/Experian Consumer Credit Default Indices shows that loan default rates have continued to decrease for eight consecutive months. The composite index showed a slight month-to-month decrease, dropping from 1.51% in July to 1.50% in August and four of the five loan types have posted their lowest rate since the end of the Great Recession.
As in previous months, the only loan type that posted an increase in default rates was auto loans, which went up from 1.01$ in July to 1.09% in August. Bank card defaults fell from 3.83% in July to 3.77% in August. First mortgage defaults decreased from 1.41% in July to 1.40% in August. The second mortgage default rate fell to 0.72%, the lowest in its eight-plus year history.
Additionally, news regarding the speed of the decrease in defaults also remained unchanged since July when the Index noted a slow-down from the beginning of the year. While default rates have fallen nationally, in three-of-the-five metropolitan statistical areas surveyed default rates rose.
Miami, Dallas, Chicago saw rate increases. Miami saw the largest increase, rising from 2.39% in July to 2.62% in August. Dallas’ rate increased for the second straight month. However, with a default rate at 1.07% Dallas continues to have the lowest of any metropolitan statistical area covered in the report.
Los Angeles’ rate dropped from 1.67% in July to 1.60% in August. New York’s rate remained flat.