by rtdosen | Feb 6, 2015 | Ryan Dosen Real Estate Articles
Lower Gas Prices and the Impact on Housing By Ryan Dosen Oil is under $50 per barrel, the AAA Fuel Gauge Report says that the national average gas price is almost down to $2 per gallon, and almost everyone is feeling better for it. According to AAA’s data, gas prices have been shaved by over one third in the past year, leaving more change in consumers’ pockets, and giving them more reason to be confident about the economy and their own futures. And as we’ve said time and time again, confident people buy stuff, including houses. Household Savings The U.S. Energy Information Administration (EIA) delivers a monthly short-term energy outlook that reports current energy prices and trends, and also forecasts future prices. The EIA’s most recent report from January 13, 2015 (when national gas prices at $2.14 per gallon), estimated that gas prices would average $2.16 per gallon for the first quarter, and $2.33 per gallon for all of 2015. Prices have fallen below the EIA’s forecast, but it is early and there is little certainty regarding the longer-term direction of gas prices. Nevertheless, the EIA projects the average household to “spend about $750 less for gasoline in 2015 compared with last year because of lower prices.” The EIA forecasts that U.S. household gasoline expenditures in 2015 could be the lowest in 11 years. Confident Consumers Riding the wave of lower gas prices, the Conference Board’s Consumer Confidence Index increased in December to 92.6. This number is close to the seven-year high hit a few months ago. Lynn Franco, Director of Economic Indicators at The Conference Board,...
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