A lack of mortgages has South Florida trailing the pack when it comes to consumer debt.
That’s the conclusion from an Equifax report showing South Florida consumer debt down 4.2 percent, the steepest drop among the country 25 largest metropolitan areas. Of the 25, six posted gains in consumer debt as more people took on mortgages and home equity lines in the wake of the housing crisis.
Dennis Carlson, an Equifax economist, said South Florida resembles other metros when it comes to credit-card balances and other categories of household debt. But the region has a noticeably smaller share of debt tied to residential real estate. He said Florida’s large number of foreclosures has a significant impact on the Equifax rankings since bank seizures essentially wipe out a consumer’s debt on a property.
“I would guess foreclosures are what’s driving this’’ in South Florida, Carlson said. He added that the oversized share of cash purchases in South Florida’s real estate market — transactions that do not create mortgage debt — also could be skewing the numbers.