Continued Improvement in 1st Mortgage Delinquency

The Composite Consumer Credit Default Index indicates that 90-day delinquency fell 5 basis points from a month earlier to 0.81 percent in May.

The index — which reflects performance on automobile loans, bank cards, and first and second mortgages — was
down from 0.88 percent a year previous.

S&P Dow Jones Indices LLC and Experian jointly reported the index Tuesday.

“Consumer credit default rates continue at the lowest levels in more than 10 years and well below those seen before the financial crisis,” David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said in the report. “These positive developments are supported by continued gains in the economy: an unemployment rate under 5 percent, combined with increases in incomes and wages and stable prices. Debt-service ratios remain close to record lows, while outstanding consumer credit and mortgage debt have risen modestly this year.”

With a 12-basis-point decline from April to 0.89 percent as of last month, New York had the biggest month-over-month improvement of any of the five-largest metropolitan statistical areas.

In Los Angeles, the May 2016 ninety-day rate on consumer credit was 0.67 percent — the lowest of any of the five MSAs.

Miami was the only MSA of the five to see deterioration — 6 BPS to 1.27 percent (the highest rate of the largest MSAs).

On
just first mortgages, the U.S. rate of 90-day delinquency was 0.63 percent, tumbling 6 BPS from April.

First-mortgage delinquency has declined each month since February, when the rate was 0.84 percent.

Serious first-mortgage delinquency also was better than in May 2015, when the rate was 0.74 percent.

Second-mortgage serious delinquency was 0.51 percent as of May 31.

The second-mortgage 90-day rate
improved by 7 BPS compared to a month earlier.