Consumer Credit Default Rates Decreased in March 2012 According to the S&P/Experian Credit Default Indices
Los Angeles Default Rates Marginally Increased in March; the Other Four MSAs Decreased
New York, April 17, 2012 – Data through March 2012, released today by S&P Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults showed that, with the exception of bank card, all loan types saw a decrease in default rates for the third consecutive month. In addition, the four that did decrease posted their lowest rates since the end of the recent economic crisis. The national composite declined to 1.96% in March from the 2.09% February rate. The first mortgage default rate decreased from February’s 2.02% to March’s 1.88%. Second mortgage and auto loans default rates also declined from 1.20% and 1.22% in February to 1.03% and 1.11% in March, respectively. Bank card was the only loan type where default rates increased in March to 4.47% from its 4.41% February level.
“The first quarter of 2012 was largely positive for the consumer,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. “Not only have we resumed the downward trend in consumer default rates that began in the spring of 2009, but we appear to be reaching new lows across most loan types. The first three months of 2012 show broad based declines in default rates with first and second mortgage, auto and composite default rates all reaching post-recession lows.
“The first mortgage default rate fell by 14 basis points in March, bringing this rate below the prior August 2011 low. The second mortgage rate fell by even more during the month, 17 basis points. Both second mortgage and auto default rates are also at their lowest in the three-plus year history of these data. While the bank card rate rose, it was not by much and is still close to the recent low reported just last month.
“Four of the five cities we cover saw their default rates drop. For the third consecutive month, Chicago saw a decline, moving from 2.84% in December to 2.35% in March. That’s almost half a percentage point and one of the two cities to post new lows. New York and Miami both fell for the second consecutive month. New York decreased slightly from 2.04% in February to 2.01% in March. Miami dropped almost a full percentage point, from 4.54% in February to 3.62% in March. While it still remains the highest default rate, Miami is the other city to hit a post-recession low. Dallas moved down from 1.61% in February to 1.44% in March and retains the lowest rate among the five cities we follow. Los Angeles was the only city where default rates marginally rose, from 1.87% to 1.88%.”
The table below summarizes the March 2012 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.
The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:
For more information:
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Jointly developed by S&P Indices and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien. The Indices are calculated based on data extracted from Experian's consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month. Experian's base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
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