Consumer Confidence Drops Again in Florida

Consumer confidence in the Sunshine State has fallen to its lowest point in a year, as more and more homeowners can’t sell their homes, and borrowers can’t get a Florida home loan.

The University of Florida’s latest index of statewide consumer confidence shows a three point drop in August, down to 78 points.

That’s lower than any month since August 2006, and far lower since the boom years of 2000-2005, when low Florida mortgage rates triggered a wave of new spending, primarily on real estate.

Some aspects of the Florida economy actually improved this month… with falling gas prices and stable inflation. But you won’t find any good news reflected in consumer moods.

Chris McCarty, a University of Florida Economist, says consumers have their eyes glued to the poor Florida housing market.

“I’d say in the short run now there’s not really anything that’s going to lift the Florida consumer, although we will work through this… this is not a permanent situation. It’s happened, though not quite to this extent, before… housing markets go up, and down, just like the stock market.”

A big stock market decline in August didn’t help consumer confidence very much. But experts say it’s getting more and more expensive to buy homes in Florida.

That’s because Florida home loan lender groups are charging higher rates for so-called ‘jumbo’ home loans for higher-prices homed.

Those Florida home loans are often necessary, of course, because Florida home prices are so high to begin with.

McCarty says things won’t get better any time soon.

“Even those who are saying not say things are going to slow down considerably. So as this effect of the housing market really takes hold, which it is doing, there’s really a possibility of a recession this year.”

SOURCE: WJHG-TV