The national default rate on first mortgages increased slightly in December to 0.71% of all loans – up from 0.70% in November but down from 0.84% in December 2015, according to the S&P-Experian Consumer Credit Default Indices.
The default rate on second mortgages fell to 0.41%, down from 0.48% in November and down 0.84% in December 2015.
The index also measures the default rates for auto loans and credit cards. The bank card default rate in December was 2.95%, up 14 basis points from November. The auto loan default rate was 1.03%, up three basis points from the previous month.
The composite default rate was 0.89%, up two basis points from November.
“National average consumer credit default rates continue at low levels in an improving economy,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “Auto and light truck sales were up each month since August as automobile consumer credit defaults held steady. Bank card sector defaults ticked up slightly in the last two months, reversing five months of flat to down reports. This may reflect rising retail since the spring and larger consumer credit extensions in October and November.”
The report shows that mortgage default patterns are stable, as well, Blitzer says.
“However, this favorable picture is likely to be tested by rising interest rates,” he says. “Home mortgage rates rose by three-quarters of one percent since Election Day.”