Mortgage default rates are seeing a slight uptick despite recent improvements in housing starts, but this news should not be a major cause of concern, according to data released last week by S&P Dow Jones Indices LLC and Experian.

Are you set up for success in 2016? Join 2,500 real estate industry leaders Aug. 4-7, 2015, at Inman Connect in San Francisco. Get Connected with the people and ideas that will inspire you and take your business to new heights. Register today and save $100 with code Readers.


Takeaways:

  • The S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed increases in first-mortgage and second-mortgage default rates in June.
  • The first-mortgage default rate of 0.8 percent in June was up six basis points from its historical low in May.
  • The indices noted that three major cities continued their downward trend and reported negative month-over-month default rates in June: Los Angeles, New York and Dallas.

Mortgage default rates are seeing a slight uptick despite recent improvements in housing starts, but this news should not be a major cause of concern, according to data released last week by S&P Dow Jones Indices LLC and Experian.

The S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed increases in first-mortgage and second-mortgage default rates in June.

The first-mortgage default rate of 0.80 percent in June was up six basis points from its historical low in May, while the second-mortgage default rate reported an increase of 13 basis points to 0.55 percent.

credit-default-indices-national

But none of these data are immediate cause for concern, as they reflect continued consumer optimism and spending, said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.

In fact, the indices noted that three major cities continued their downward trend and reported negative month-over-month default rates in June: Los Angeles, New York and Dallas.

credit-default-indices-5MSAs

“The economy continues to expand at a modest pace, helped by the 5.3 percent unemployment rate, a continued low rate of initial unemployment claims and recent improvements in housing starts,” Blitzer said. “We would need higher inflation for a long time period before it would worry consumers or cause a pause in spending or credit usage.”

The S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month and track the default experience of consumer balances in first- and second-mortgage liens, as well as in auto loans and bank cards.

Email Amy Swinderman.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Hear from Realogy, Pacaso, SERHANT., Spotify, Redfin, Douglas Elliman, and 100+ more leaders at ICNY.Register now×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription