August Consumer Credit Default Up Slightly

S&P Dow Jones Indices and Experian, New York, reported small increases in numerous default rates in August, including in three of the five cities surveyed.

The S&P/Experian Consumer Credit Default Indices reported the composite rate at 0.85% in August, up two basis points from July. The first mortgage default rate reported 0.68% for August, up two basis points; auto loan defaults came in at 1.01%, up eight basis points from July. The bank card default rate saw the only decrease in August at 2.86%, down six basis points from July.

New York reported an 0.91% default rate for August, rising 14 basis points from July’s 0.77%. Dallas’s default rate increased five basis points to 0.74%. Chicago also saw its default rate increase, up four basis points, to 0.93%. Los Angeles reported a default rate of 0.60%, a decrease of three basis points. Miami reported a decrease, the first since February, of 16 basis points at 1.21%.

“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,” said David Blitzer, Managing Director and Chairman of the Index Committee with S&P Dow Jones Indices. “Bank card default rates are more volatile and slightly higher than those tracking mortgages or auto loans…the overall consumer credit picture gives little reason to be concerned about default rates.

Blitzer noted that mortgage debt peaked in first quarter 2008 and reached its most recent low point in first quarter 2015, but is now up 2.1% from. “Barring a repeat of the recent and severe recession, both consumer credit and mortgage debt outstanding are expected to continue growing at, or faster than, the pace of nominal GDP growth,” he said.