Data released today by Standard & Poor’s and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, show that the monthly default rates declined for first and second mortgages and auto loans, but climbed for the third month in a row for bank card loans. Through the end of April, 2010, auto loan defaults were 1.9%, down from 2.4% in March. Defaulting balances of bank card loans were 9.1% in April, up from 8.9% in March and 7.7% from a year earlier. First and second mortgage default rates were 3.7% and 2.5%, both down from March.
“Consumer defaults continue to moderate in the key big ticket items of first and second mortgages and auto loans. In these areas, defaults bottomed out around the same time as the stock market in the first half of 2009. Bank cards on the other hand continue to worsen and are at levels not seen in the history of these indices,” says David Blitzer, Managing Director and Chairman of the Index Committee at S&P Indices. “With attention focused on consumer spending and little hope for a fast rebound in housing, the bank card series may raise concerns for many consumer related businesses as well as for consumer oriented lending institutions.”
Consumer credit defaults vary across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release, Chicago showed the smallest decrease of 5.8% in the past year. The sharpest decline was in Miami where defaults declined 40.5% in the last 12 months and 7.9% in the past month.
“Regional variations in default rates are typical. The sharp declines in Los Angeles and Miami reflect a somewhat more stable, though still weak, housing market as well as some overall economic improvements seen in recent months,” commented Blitzer.