Consumers are doing a better job paying off their debts, according to an index of defaults on mortgages, credit cards and auto loans.
Four of the five types of loans tracked by the S&P Dow Jones Indices and credit reporting company Experian dropped in July for the seventh straight month, falling to their lowest level since the end of the Great Recession in 2009, according to a report Tuesday. Only second mortgages saw a slight increase from June.
Credit card defaults showed the biggest improvement in July, dropping to their lowest level since August 2007.
But the pace of improvement in default rates slowed in July compared with earlier in the year, and was not spread evenly throughout the U.S. The composite default index was 1.51 in July, down from 1.52 in June, but well below the 2.06 reading from a year earlier.
"Looking at the rate of new defaults in mortgages or auto loans, the consumers' credit position has recovered from the financial crisis," said David M. Blitzer, chair of the Index Committee for S&P Dow Jones Indices. "However, other data show that previously defaulted mortgages remain an issue and many consumers still face an overhang from old debts."
Of the five major markets, New York and Miami saw their consumer credit default index level drop to post-recession lows. Chicago's rate was flat. But default rates rose in Los Angeles and Dallas.