Most consumer default rates hit post-recession lows in September
WASHINGTON -- Consumers did a better job making on-time payments for mortgages and credit cards last month than at any point since the end of the Great Recession.
A leading index of defaults on consumer loans fell in September for the ninth straight month, hitting its lowest level since 2009.
Defaults in four of the five loan categories tracked by the S&P; Dow Jones Indices and credit reporting company Experian also dropped to their lowest level 2009, the companies said Tuesday.
Auto loan defaults were the only category to show an increase in September.
The overall composite index of all consumer loan defaults dropped to 1.46%, a post-recession low.
“We think it is very fair to say that 2012 has proven to be a period of financial repair for consumers”, David M. Blitzer, chairman of the index committee for S&P; Dow Jones Indices, sain in a statement. “Consumers’ financial condition continues to improve as witnessed by these declining credit default rates.”
Loan default rates have fallen as consumers have cut their overall debts to pre-recession levels, The Times reported Monday.
The improvement was spread consistently across the nation. All five major cities in the S&P;/Experian Consumer Credit Default Indices had lower rates in September compared with the previous month. And three cities -- Los Angeles, Chicago and New York -- set post-recession lows.
L.A.’s index was 1.45% in September, down from 1.6% in August and 2.12% a year earlier. Miami showed the biggest year-over-year improvement, dropping to 2.48% from 4.59%.
“We have seen broad-based declining trends in default rates through all of 2012, and all markets and loan types are at or near pre-recession lows,” Blitzer said.
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