First and second mortgage default rates in July fell to levels lower than three years at the onset of the recession three years ago despite continued high unemployment levels.

The S&P/Experian Consumer Credit Default Indices reported today that second mortgage default rates experienced the largest decrease in July from 1.40 percent to 1.25 percent. First mortgage and bank card default rates decreased to 1.93 percent and 5.64 percent respectively, from June rates of 2.02 percent and 5.69 percent

“By and large, July’s data support the downward trend we have observed over the past two years. Despite high unemployment rates, consumers continue to improve their financial positions, resulting in lower default rates than we were seeing during the recession,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices.

“All indices show default rates well below where they were in 2008 and 2009. However, occasional increases in some of the regional composites suggest that default rates may not fall a lot farther. While recording the highest default rate of the five cities we report, Miami is still far off the near-19 percent it had reported two years ago. However, the sluggish economies in both Miami and Chicago appear to be having a more severe impact on their residents than some of the other markets. Recent housing data has also pointed to weakness in these two markets beyond the national averages,” Blitzer said.

Consumer credit defaults varied across major cities in the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Dallas experienced a small increase in default rates, from 1.59 percent in June to 1.60% in July. Los Angeles and Miami decreased moderately to 2.15 percent and 5.37 percent, respectively from 2.17 percent and 5.41 percent. New York and Chicago saw default rates decrease to 1.80 percent and 2.54 percent in July, from 1.82 percent and 2.59 percent in June, respectively.