There’s no doubt the COVID-19 pandemic has created an economic crisis in the U.S., despite some recent improvements. Unemployment is around 7.9%, the economy is about 3.5% smaller than at the end of last year, according to the Wall St. Journal, and 751,000 workers filed initial unemployment claims in the third week of October.
To find the cities where people are in the most financial distress, WalletHub compared the 100 largest cities across nine key metrics in six overall categories, calculated an overall score for each city and then ranked them. The data are from from the U.S. Census Bureau, Administrative Office of the U.S. Courts, Google Ads and WalletHub data. The categories are:
- Credit score,
- People with accounts in distress, (an account in distress is either in forbearance or has its payments deferred)
- Average number of accounts in distress,
- Change in the number of bankruptcy filings (June 2020 vs. June 2019)
- “Debt” search interest index
- “Loans” search interest index
Because of data limitations, three cities were excluded: Lexington, Ky., St. Paul, Mo., and St. Petersburg, Fla.
In this ranking, a rank of 1 represents the worst conditions for that metric.
Austin, Texas, ranks No. 1 for having the most people in financial distress, the study shows. North Las Vegas has the highest average number of financial accounts in distress. Indianapolis ranks worst in the credit score category, which looks at average credit scores and change in credit score. Des Moines, Iowa, has the highest increase in bankruptcy filings. Search interest for “debt” and “loans” on Google (GOOGL) - Get Report was highest in major cities like New York, Houston, Chicago and Los Angeles.
The cities faring the best overall appear to be Anchorage, Alaska, Madison, Wis., and Jersey City, N.J.
Cities with the fewest people in financial distress include tech-hub cities in California: San Jose, Fremont, and San Francisco.
Based on WalletHub’s study, these are the U.S. cities in most financial distress.