Data through May 2011, released today by S&P Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed first and second mortgages default rates decreased in May to 2.09% and 1.42%, respectively, from April values of 2.16% and 1.51%. Auto loans default rate went down from 1.45% in April to 1.34% in May; while bank cards experienced a slight increase from 5.91% to 5.93%.

"While we might observe volatility from month-to-month, looking at default rates over the past few years it is easy to see that consumers have come a long way in fixing their balance sheets, " says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. "All indices show default rates below where they were this time last year, and more so if you look back to 2008/2009.

"We do continue to see some differences among the cities. While Miami's high unemployment rate contributes to its high default rate compared to some of the other cities, such as New York and Chicago, it is not the only variable. The latest MSA-level unemployment data show that at about 11%, Los Angeles and Miami have unemployment rates above the national average; however, the 2.39% default rate for Los Angeles is almost half that of Miami's 5.31%. Among the other local factors affecting default rates is the aftermath of the housing bust. While both Los Angeles and Miami were among the cities with the largest home price increases, housing in southern California is doing better than housing in south Florida."

Consumer credit defaults varied across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Los Angeles and New York continue to lead the way with the largest decrease in defaults rates to 2.39% and 1.94%, from 2.57% and 2.11%, respectively. Chicago and Miami were not far behind with defaults decreasing to 2.37% and 5.31%. Dallas's default rates increased modestly this month to 1.59% from 1.56%.