Data through August 2012, released today by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed that most loan types saw a decrease in default rates including the national composite, which is now down for eight consecutive months.

Four of the five loan types posted their lowest rate since the end of the 2007/2009 recession. Only the auto loan default rate increased, from 1.01% in July to 1.09% in August. The bank card default rate fell the most in August, from July's 3.83% to 3.77%. The first mortgage default rate decreased slightly from 1.41% in July to 1.40% in August. At 0.72%, the second mortgage default rate fell to the lowest in its eight-plus year history. The composite index showed a post-recession low of 1.50%, slightly below July's 1.51%.

"While continuing to fall, most of the August changes in default rates were small compared to what we saw in the first half of the year," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "As the consumers' financial condition continues to improve their credit default rates showed small changes from July to August, in most cases the trend was either down or flat.

"The auto loan rate rose eight basis points in August to 1.09%, but this was from July's eight-plus year historic low. Bank card, first and second mortgage and composite default rates hit new post-recession lows. The first mortgage default rate has been down or flat for eight consecutive months, a good sign for the housing market.  Second mortgage default rates were down in all but one of those same months. Bank card default rates fell the most in August, down six basis points to 3.77%, its lowest rate since February 2007, more than five years ago.

"Miami's default rate rose from July's post-recession low -- 2.62% in August, up from July's 2.39%. Dallas' and Chicago's rates also rose in August, to 1.07% and 1.92%, respectively. This was the second month that default rates rose in Dallas, but 1.07% is still the lowest of the five cities we publish. Los Angeles was the only city where the default rates fell in August; 1.60% versus July's 1.67%, a post-recession low for that city. New York remained flat at its 1.49% post-recession low.

"While there has been a bit of volatility among loan types and cities, the basic trend has not changed.  Consumers are continuing to repair their balance sheets, as evidenced by diminishing default rates.  For the housing market, there are still a substantial number of loans outstanding that defaulted in the past and that segment of the market is still of concern.  But for 2012, the drop in mortgage default rates is a good sign for the housing market and the consumer."

The table below summarizes the August 2012 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs: