Report: Credit default rates remain below year-ago levels
Posted on Wednesday, November 19, 2014 at 8:12:59 AM
Access to credit, such as residential or auto financing, is a vital resource for many consumers today. According to a recent report from the S&P/Experian Consumer Credit Default Indices, October's national credit default rates are still below levels seen at the same time last year.
However, there were slight increases from September to October. The national composite increased two basis points from the month prior, while the first mortgage default rate ticked up to 0.96 percent during that time.
"With the continued increase in the composite default rates, the overall movements have still been very small," explained David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices. "The continued six month upward trend in auto loan default rates does coincide with strong automobile sales over the same period. Despite the small increases in default rates, bank card and second mortgage default rates are currently at historical lows."
In addition to the trends with default rates, the Mortgage Bankers Association reported an increased interest in residential financing. On a weekly basis for the seven-day period ending Nov. 14, mortgage applications rose 4.9 percent. On the other hand, the refinance share of mortgage activity slipped from 63 percent to 61 percent at that time.