Thursday, April 27, 2006
Gas & Housing
Mortgage News Daily presented the following points in their commentary: The Effects Of High Gas Prices On The Housing Market:
* Could revitalize urban areas as the cost of commuting outpaces the higher cost of housing in city centers.
* Will place more pressure on city workforce housing issues.
* Will cause the Fed to continue to raise the federal funds rate, tempering prices further as mortgage rates rise.
* Will increase cost of construction materials and labor. These are already stressed due to the high demand and inadequate supply situation the market is currently experiencing.
There is the possibility that Americans will be shocked with the discovery that more expensive oil is here to stay and decide that significant changes in lifestyle are immediately called for. If as a result, consumers make sudden changes in plans for spending on such things as cars, durable goods, and vacations, vendors of those products may find themselves left in the lurch. This does not bode well for housing, especially investor and second home markets. But it helps explain why towns with easy access to reliable mass transit continue to see an influx of buyers.
Meanwhile, to keep tabs on the cheapest towns to gas up: