CredAbility’s Q3 Consumer Distress Index Shows Declines

""CredAbility"":http://www.credability.org/en/homepage.aspx has released its third-quarter findings, and the news is less than ideal. The company's ""Consumer Distress Index"":http://www.credability.org/en/about-credability/media-center/Consumer-Distress-Index/default.aspx displayed the most significant drop in consumer financial health on record since 2008, largely due to increases in mortgage delinquencies, late payments by renters, and an uptick in housing expenses.

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CredAbility also noted the decline in consumer confidence as a chief catalyst behind the flagging data, which reversed the gains seen during the previous three quarters. Citing rising pricing for food, gasoline, and other necessities coupled with the increase in under-employment, CredAbility's final evaluation of distress among U.S. households totaled 66.7 on the company's 100-point scale, down from 69.2 for the second-quarter of the year.

According to CredAbility's measurements, a national score below 70 indicates a general state of financial distress, and the quarterly statistics release examines five key consumer categories including employment, housing, credit, family management of household budget, and net worth. Based on CredAbility's findings throughout 2011, the country's consumers have been in financial distress for 12 consecutive quarters.

Mark Cole, the company's chief operating officer and

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author of its index, said of the recent results, ""The fragile gains made during the past one and a half years have been swept away in a single quarter. The mortgage delinquency rate is no longer improving and household budgets are being squeezed by rising gas and food costs. Unless consumers are willing to borrow, they'll need to scale back their holiday spending.""

Within the survey's housing segment, the numbers showed a six point decline, ringing in at 63.84, which CredAbility notes was due primarily to the 1.19 percent rise in delinquency rates for the third-quarter. The company's household budget category sank by eight points, coming in at 66 for the period, due to falling discretionary income and a reduction in positive consumer sentiment about the broader economy.

However, the credit segment of CredAbility's survey rose by two points to 84.95, which is the highest score in two years. The company credits an overall drop in credit card delinquency and other consumer loan delinquency for the uptick.

By state, CredAbility found that nine states have slipped back toward distress during the third-quarter, including Texas, New Jersey, and Pennsylvania. On the west coast, California appears to be stabilizing, despite a small drop in its overall distress score, and across the nation, no state was able to improve on its distress numbers from the previous quarter.

The strongest states, based on CredAbility's statistics, continue to be those in the Northeast and Mid-Atlantic, with those regions racking up the most elevated scores. Both Virginia, with a distress reading of 73.48, and Minnesota, with a score of 73, are the two most populous states making it into the top 10 among CredAbility's survey areas. Other states making the top 10 list of performers include North Dakota, South Dakota, Nebraska, Wyoming, Alaska, Vermont, Iowa, and New Hampshire.