National Credit Default Rates Reach Eight Year Low in May 2014, According to the S&P/Experian Consumer Credit Default Indices
Four of the Five Cities Saw Default Rates Decrease in May 2014
New York, June 17, 2014 – Data through May 2014, 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, showed decline in national default rates from the previous month. The national composite posted 1.04% in May, the lowest default rate since May 2006. Both auto and bank card saw their default rates increase while mortgage default rates decreased. After setting new historic lows in March and April, the auto loan rate increased marginally by one basis point to 0.93%. The bank card rate was 2.97% in May, up 13 basis points over the prior month. The first mortgage default rate continued its downward trend from 1.30% in October 2013 to 0.92% in May 2014.
“Consumer credit default rates decreased for their seventh consecutive month,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. “The national composite is now only one basis point above its historic low. Mortgage default rates saw the biggest decline when compared to auto and bank card rates. Although historically low default rates are welcome, some home buyers may have difficulty qualifying for mortgages. Last year saw a surge in home prices but we are seeing signs of slowing gains this year. One question is whether banks are willing to make mortgage loans as home prices rise faster than incomes.”
“New York was the only city to see its default rate increase but it showed the largest drop-off from one year ago. Dallas posted a new historic low of 0.77% while Chicago, Los Angeles and Miami are at their lowest default rates since the start of the last recession. Miami continues to maintain the highest default rate of 1.74% while Dallas maintains the lowest rate of 0.77%. All five cities – Chicago, Dallas, Los Angeles, Miami and New York – remain below default rates seen a year ago.”
The table below summarizes the May 2014 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.
The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:
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About Experian
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2014 was US$4.8 billion. Experian employs approximately 16,000 people in 39 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.
For more information:
Dave Guarino
Communications
S&P Dow Jones Indices
dave.guarino@spdji.com
(+1) 212-438-1471
David Blitzer
Managing Director and Chairman of the Index Committee
S&P Dow Jones Indices
david.blitzer@spdji.com
(+1) 212-438-3907
Jordan Takeyama
Experian Public Relations
jordan.takeyama@experian.com
(+1) 714-830-7561
Jointly developed by S&P Dow Jones Indices LLC and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed to track the default experience of consumer balances in four key loan categories: auto, bankcard, 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 every month. Experian's base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
For more information, please visit: www.consumercreditindices.standardandpoors.com.
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