The default rates for mortgages written in 2006 and 2007 are significantly higher than previous vintages, according to Standard & Poor's. The ratings agency said default rates for all U.S. mortgages improved in the third quarter and were better than the first half , "though a full recovery within the housing market remains largely elusive." Analysts said the performance of loans in securitized residential loans has "progressively deteriorated from one vintage to the next, and the cumulative default rate for subprime loans from 2007 is 55%, which "puts them on track to be the worst performers yet." (Click on chart to expand.) Standard & Poor's said the '07 subprime loans are defaulting at a rate 100 times that of prime loans from 2005, which saw just 0.54% of mortgages default. Analysts said they remain wary about the housing market because declining liquidation rates may point to any momentum in home price as simply temporary. "The delayed liquidations create a supply of unresolved distressed properties that have yet to be remarketed for sale and may be skewing the visible supply of homes for sale," according to Standard & Poor's. Earlier this week, Fitch Ratings said the shadow inventory in the U.S. is nearly 7 million homes and may take 40 months to clear. Standard & Poor's said the shadow inventory is a key driver to the slow recovery in the housing market, and "will also likely drive home prices down when the backlog clears and finally enters the market." The ratings agency also said default rates on 30-year mortgages outpace 15-year loans five to one. (Click on chart to expand.) Write to Jason Philyaw.