First mortgage default rate at highest level since September 2020
Credit rating agency Experianwith the S&P Dow Jones Indicesreleased its latest monthly iteration of its Consumer Credit Default Index Report for June 2022 which aims to represent a “full” measure of changes in consumer credit default rates and shows that the composite default rate increased by two basis points to 0.53%.
Breaking down the total default rate, the first mortgage default rate rose two basis points to 0.38%. the highest default rate since September 2020. Additionally, the bank card default rate increased six basis points to 2.55% and the auto loan default rate increased one basis point to 0.62%.
Four of the top five metropolitan statistical areas as defined by the US Census Bureau posted higher default rates compared to last month. Miami saw the biggest increase, up 15 basis points to 0.99%. Chicago and Dallas each rose five basis points, to 0.58% and 0.57% respectively. Los Angeles was a basis point higher at 0.46%. New York City fell six basis points to 0.71%.
Jointly developed by S&P Dow Jones Indices LLC and Experian, the S&P/Experian Consumer Credit Default Indices are released on the third Tuesday of each month at 9:00 a.m. ET. They are designed to track the default experience of consumer balances in four key loan categories: auto, credit card, 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 each month. Experian’s database of contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans from 11,500 lenders.