The composite rate and first mortgage default rate both unchanged from last month at 0.87% and 0.7%, respectively, in November. Auto loan defaults recorded a 1.00% default rate, down eight basis points from October. The bank card default rate came in at 2.81%, up five basis points from the previous month.
According to the S&P/Experian Consumer Credit Default Indices, three of the five major cities saw their default rates decrease in the month of November. Dallas had the largest decrease, reporting 0.66%, down 10 basis points from October. New York saw its default rate decrease by two basis points to 0.91% in November, and Chicago reported a decrease to 0.96%, down one basis point from the previous month. Los Angeles saw its default rate increase, up eight basis points to 0.70%.
Miami’s default rate spiked to 1.44%, up 38 basis points in November and setting a 12 month high. The default rate increase of 38 basis points is unmatched in Miami since January 2013. A historical review of Miami’s basis points movement in November shows increases since 2005, suggesting a seasonal up-trend in defaults for the month of November.
Among the five cities regularly tracked in this report, Miami has consistently shown the highest default rate. One factor may be that home prices rising in Miami and mortgages are the largest portion of the city composite rate.
While Dallas home prices are rising faster than Miami, Dallas prices fell far less in the housing bust and have rebounded to new all-time highs. Miami home prices remain more than 20% below the highs set in 2006.
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