11/19/2023 0 Comments 2016 mortgage defaults![]() ![]() ![]() ![]() Debt service ratios are close to the record lows set in the last two years as well. Conditions today are much improved not only are defaults down, but outstanding mortgage balances were about 12% below the peak seen in the first quarter of 2008. “Large mortgage debts followed by rapidly rising defaults in all kinds of consumer credit were key causes of the financial crisis. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The continuing low rates of consumer credit defaults in mortgages, auto, and bank card loans are positive signs for the economy, “ says David M. Dallas was the only city to report a default rate decrease, with a 0.75% default rate, down 28 basis points from February. Chicago reported a default rate increase of one basis point, posting a 1.03% default rate for March. New York reported a default rate of 0.99%, a two basis point increase from the previous month. Los Angeles recorded a default rate of 0.81% in March, up five basis points from the prior month. Miami reported a default rate of 1.15%, up eight basis points from February. The bank card default rate increased 36 basis points in March, recording a default rate of 2.92%.įour of the five major cities saw their default rates increase during the month of March. Auto loan defaults recorded a 1.02% default rate, down three basis points from February. The first mortgage default reported a 0.77% rate for March, down seven basis points from the prior month. New York witnessed the largest decrease, falling six basis points from June to 0.82%.New York, Ap– Data through March 2016, released today by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, shows a composite rate of 0.93% in March, down four basis points from the previous month. The report also spotlights the consumer default composite indices for five major cities, shown in the chart below. “However, retail sales excluding autos as well as auto sales are down slightly since April, while home sales are little changed in recent months. In the year ending June 2017, consumer credit outstanding rose 5.7%, outpacing most spending categories across the economy,” he said. “Consumers’ use of credit is growing and the level of consumer credit outstanding is at an all-time high. “Default rates for autos and first mortgage loans are at their lowest points in the last ten years, while bank card defaults remain modest,” says David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.” This second chart gives a broader picture and shows the changes in default rates over the last ten years. (Source: S&P/Experian Consumer Credit Default Indices) The indices represent a comprehensive measure of changes in consumer credit defaults and include bank card and auto loan default rates.Īs seen in the chart below, the first mortgage default rate increased two basis points from June to 0.62%. In fact, the mortgage default rate for first and second mortgages aren’t too far off from their July 2016 level, as homebuyers get better at paying their mortgage on time. Despite a slight increase in July, the default rate for first mortgage loans still sits at its lowest point in the last 10 years, according to the latest S&P/Experian Consumer Credit Default Indices.
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