CEO says additional targeted federal assistance is still needed
Despite the coronavirus recession, housing activity soared to a near-record high in October while consumer stress abated to its second-lowest reading on record.
“Consumer financial stress is largely muted due to the federal government's emergency actions,” LegalShield CEO Jeff Bell said. The LegalShield Consumer Financial Stress Index improved by 1.5 points in October on LegalShield’s scale, from 65.6 to 64.1, marking the second-lowest reading on record.
Meanwhile, the LegalShield Housing Activity Index, a leading indicator of housing starts, edged up 1.1 points from 112.5 in September to 113.6 in October, its strongest reading since November 2005. The housing construction and foreclosure indices also showed improvement.
The housing construction index posted a 6.4-point increase from 134.7 in September to an all-time high of 141.1 in October, driven by a 6.3-point decline in the foreclosure Index.
However, LegalShield warned that foreclosure activity might spike as eviction moratoriums for renters expire – creating debt-servicing problems for landlords.
“Many CARES Act provisions have now expired while winter is coming amid rising coronavirus cases,” Bell said. “Millions of Americans are looking to Democrats and Republicans to come together to pass a targeted package of stimulus measures to help the consumers and small businesses most in need.”
With many small businesses struggling stay afloat in the COVID-19 era, the Bankruptcy Index slightly worsened in October, up 2.0 points from 28.8 to 30.8 for the month. However, it remained 11 points below pre-pandemic levels.
“Almost certainly, President-Elect Biden will inherit one of the most precarious economic landscapes of the last century,” said Bell. “While we now have a lame-duck Congress and lame-duck President, we cannot simply wait until next year to begin to address the challenges facing the country today. We need our elected leaders to find common ground and act now.”