The economic expansion just passed the eight-year mark, and consumer credit defaults across mortgages, bankcards and auto loans are at pre–financial crisis levels. More specifically:
- The first-mortgage default rate dropped 4 basis points from May to 0.60%.
- The bankcard default rate experienced its first drop in 9 months, with a decrease of 4 basis points bringing it to 3.49%.
- Auto loan defaults decreased 3 basis points from the previous month to 0.82%.
With inflation at 1% to 2%, debt service levels close to record lows, and disposable income increasing and supporting spending growth, consumers are in good financial shape nationally. Lenders should take this opportunity to review and adjust their acquisition strategies accordingly.
