As homeowners continue to sell or walk away from homes that they can no longer afford, the carnage caused by the financial crisis continues to recede.
The national mortgage default rate dipped in December to 1.35% of all homes with a mortgage, according to the S&P/Experian Consumer Credit Default Indices – a slight decrease from 1.37% in November.
The first mortgage default rate was 1.27% in December, marginally down from 1.28% in November. The second mortgage default rate was 0.76%, down from 0.78% the month prior.
Similarly, defaults on auto loans dipped to 1.12% of all loans in December, down from 1.15% the previous month.
Defaults on credit cards, however, increased to 2.98%, up slightly from a historic low of 2.97% set in the past two months.
‘Consumers' financial condition continues to improve,’ says David M. Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices. ‘Across all categories, default rates are continuing a downward trend. Other data confirm the improving trends: Mortgage foreclosures were sharply lower in 2013 compared to 2012, the Federal Reserve's measure of consumer debt service as a percentage of income is at a record low and consumer credit usage is expanding. The indices remain at pre-financial crisis levels.’
Miami posted the largest increase in mortgage defaults for December at 2.74%, up 28 basis points compared to November.
Los Angeles, meanwhile, saw its default rate decline for a fifth consecutive month, reaching 1.07%, the lowest since July 2006.
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