34
DEFAULT FALLS
TO LOWER
LEVELS IN
LARGE METROS
As the unemployment rate and other
economic measures continue to improve,
American consumers appear to be gaining a
greater ability to meet their credit obligations.
A report released by S&P Dow Jones
Indices and Experian showed a decline in
default rates among five of the largest cities in
the nation to historically low levels.
e national composite for all types of
credit default posted 1.02 percent in June, its
lowest reading since the organization began
collecting the data 10 years ago.
Consistent with recent reports that
payment priorities may be shifting among
Americans back to pre-downturn norms,
mortgages lead the way with first mortgages
clocking in at just 0.89 percent default. e
default rate at second mortgages was even
lower at 0.57 percent.
"Consumer credit default rates continue to
drift lower and have reached a historical low,"
said David M. Blitzer, managing director and
chairman of the Index Committee for S&P
Dow Jones Indices.
"Recent economic reports are encouraging
with the unemployment rate now at a six-
year low and strong job creation in recent
months. e continued declines in consumer
default rates confirm other indicators of an
improving economy. Credit standards for
mortgage loans continue to be somewhat
restrictive and may be contributing to low
first mortgage default rates."
Of the large metropolitan areas surveyed,
Dallas was the only city to actually see a rise
in default levels. However, the slight increase
comes on the heels of the city's lowest rate of
default recorded in the history of the survey
the previous month.
Concerns about the direction of the
economy and the effect that is has on the
credit market are not unfounded, but even
as the housing recovery slows, the lack of
significant default in the market can only be
seen as a positive indicator.
More than two-thirds of parents
living with adult children want
their children to keep living with
them, according to Fannie Mae.
KNOW THIS
