U.S. consumer confidence improved nearly six points last month overall, with a similarly steady four-point bump here in Florida. The recent results reflect optimism regarding the long-term future of the state and national economy, and not the significant downturn that many University of Florida researchers were predicting.

“The rise in confidence comes as a surprise given what is happening in the economy that should be affecting consumers,” said Chris McCarty, who runs the Florida Consumer Attitude Survey at the school’s Bureau of Economic and Business Research.

“Gas prices declined a bit in June, but so did the stock market. The Federal Reserve has induced rises in interest rates on credit cards and home loans. It’s unclear why consumers are so optimistic about the future,” he said.

Perception of national economic conditions over both the short- and long-term rose significantly, as did expectations about personal finances a year from now. McCarty urged, however, that the confidence level could soon drop again because of the tenuous Florida housing market.

In particular, buyers who took out low-interest, adjustable-rate Florida home loans around three years ago are about to be inundated by adjusting (and rising) rates as the loan matures. This could also spark a widespread trend of mortgage refinancing.

“It is unclear how many Florida households will be impacted by this phenomenon, but we should keep in mind that Florida has one of the highest rates of using these types of loans over the past several years, given the high appreciation of housing prices,” McCarty said.

Americans are resilient. Even as Florida home loan rates continue to rise - and gas prices sky-rocket - consumer confidence improved throughout June.

The University of Michigan’s Survey of Consumers stated that the Index of Consumer Sentiment was 84.9 in the June 2006 survey, up from 79.1 in May. Most of the gain this month was in individuals’ evaluations of current economic conditions; investors in Florida real estate, for example, still see potential for profit.

“Rather than a free-fall in confidence that has sparked recessions in the past, consumers have demonstrated a resilience based on a newfound sense of long-term economic stability,” said Richard Curtin, director of the survey.

Taking out Florida home loans, analyzing spending: The year ahead

While consumers will curtail their spending in the year ahead to accommodate higher gas prices and smaller cash-outs from Florida home loan refinancing, the spending cutback will be moderate.

While high energy prices are no longer viewed as temporary, individuals have not abandoned their view that inflation will revert to lower levels over the longer term. For the near future, however, they are concerned.

“Just one-third of all consumers expect their financial situation to improve, with a rising number that expect inflation to offset any wage gains they receive during the year ahead,” said Curtin.

Only time will tell the results, of course. For now, potential buyers just need to organize their debts and look at their credit score if they wish to be approved for a Florida home loan.

Low unemployment and a rising stock market have raised the confidence of Florida consumers to a six-month high in January, according to the Gainesville Sun. That’s good news, but some economists are warning that a decline is imminent as the red-hot housing market begins to cool off.

The consumer confidence meter for jumped to 95 in January among Florida residents, up from 91 in December. This estimate was the conclusion of a survey done by the University of Florida’s Bureau of Economic and Business Research. It uses a scale between 2 and 150. The highest recorded consumer confidence in the state was 112 in early 2000, right about when the stock market peaked.

“Ninety-five is, historically, a relatively high number,” survey director Chris McCarty said. “Homeowners that were expecting quick turnover in their property will no doubt be forced to hold on to it longer. This slowdown in housing will have an effect on other areas of the economy, such as sales of furniture, appliances and home improvement stores.”

Unemployment was at 3.3 percent statewide in December. Energy prices are expected to jump once again, and Florida mortgage rates aren’t likely to compare to the low levels of the past several years, as the Federal Reserve keeps bumping them higher. All of this will put pressure on housing prices that are currently over value, according to the survey.

In fact, McCarty predicts that by the end of the year, housing prices will even dip in some markets, affecting the ability of a large number of owners to extract home equity. Is Florida headed for a difficult economic period? Doubtful. While pricier Florida home loans will cause housing prices to stabilize, the state’s real estate boom is widespread and demand will remain high enough to stave off any severe market correction.

Despite a slight drop off in existing home sales last month, this year’s figures are still ahead of the pace from October 2004, according to a National Association of Realtors report. that in October, existing homes sales for both single-family and condos declined moderately.

The survey indicated that “total existing home sales,” comprised of single-family, townhomes, condominiums and co-ops, were down 2.7% to a seasonally adjusted annual rate of 7.09 million units. September’s total existing home sales rate was 7.29 million. Overall housing remains strong in comparison to the previous year, with sales for October 2005 coming in 3.7% above the October 2004 level of 6.84 million.

“The accelerated trend in existing home sales that began in 2002 remains intact despite fluctuations in interest rates,” says Bob Walters, Chief Economist of Quicken Loans. “Overall interest rates have been favorable toward housing for several years, and a positive employment outlook coupled with strong consumer sentiment continues to drive the industry’s robust performance.”

These numbers are supported by the Florida home loan market. As previously discussed, Jacksonville housing numbers, along with other areas of the state, have remained strong in recent months.