Default rates on first mortgages increased for the fourth consecutive month in December, as the most recent S&P/Experian Consumer Credit Default Index rose slightly to 2.24 percent, up from 2.22 percent in November.
The auto sector noted a similar rise in default rates, even as the industry began to enjoy a resurgence in demand and financing activity. Default rates on auto loans increased to 1.27 percent in December, up from 1.17 percent the month before. Overall consumer default rates are expected to taper off in 2012, as an increasingly frugal consumer population moves to rein in excessive debt and improve their financial health. "Led by the mortgage markets, the second half of 2011 saw a slight reversal of the two-year downward trend in consumer credit default rates," said David Blitzer, managing director and chairman of the index committee at S&P. "First mortgage default rates rose for the fourth consecutive month, as did the composite." First mortgage default rates have risen from 1.92 percent in August to the current reading of 2.19 percent.