Even though first-mortgage delinquency stands higher than it did a year ago, residential loan servicers made gains on a month-over-month basis.
Ninety-day delinquency on consumer credit — including automobile loans, bank cards and first- and second-lien mortgages — was 0.89 percent as of May.
That was according to the Consumer Credit Default Composite Index, which indicated consumer performance improved from 0.92 percent the previous month.
But the rate has worsened compared to 12 months earlier, when the index was 0.86.
S&P Dow Jones Indices LLC and Experian reported the index Tuesday.
At 0.80, Dallas’ composite index was down 2 basis points from April. Similarly, Chicago’s rate was down 2 BPS to 0.88.
The rate in Los Angeles was 0.62 percent, up 3 BPS.
The report indicated that 90-day delinquency on U.S. first mortgages was 0.66 percent at the conclusion of last month.
A 2-basis-point improvement in the first-mortgage rate was recorded versus April of this year.
David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, attributed the improvement to “the economy turning in good numbers with low unemployment, low inflation and gradually rising wages.”
But, as was the case for the composite index, first-mortgage 90-day delinquency deteriorated from May 2017, when it stood at 0.64 percent.
Blitzer said that from the peak in mortgage debt outstanding as of early 2008 to the low in 2014, mortgage debt fell 12.6 percent. America’s book of business now stands roughly 6.1 percent below its peak.
“Looking ahead, there may be some concern about how long the moderate default rates can continue,” Blitzer said. “Savings as a percentage of disposable income is declining. At the current level of 3 percent, it is near the low point seen in the boom before the financial crisis. While inflation remains low, wage growth is not very high and home prices are rising two to three times faster.
“Any rapid rise in defaults will wait for the next recession, whenever it comes.” Â
