The Mortgage Acumen

Can Tumbling Gas Prices Save the Economy

mycmps | 03 December, 2008 14:50

14 consecutive weeks of falling gas prices has been the one bright spot on this economic downturn for many Americans. With the national average at $1.80 per gallon, gas prices have tumbled in excess of 55% from their high during the high consumption of summer driving in July.

I have seen gas prices fall from a high of $4.69 down to $1.59 in my local market. Based on the fact that "the average American uses 500 gallons of gasoline every year", this equates to be a potential annual savings of $1,550 locally.

I am sure that no one is complaining of the savings.

Will this savings actually translate into new spending? For many, the real savings will be transferred to paying off debt that they subsidized their lifestyles during the speedy run up.

Can tumbling gas prices save the economy?

Many so called experts would want you to believe that the combination of falling gas prices and the recent trend of lower mortgage interest rates will lead to the resurgence of the wealth effect, which will accelerate the stabilization of the housing market.

Whether it will or will not save the economy, tumbling gas prices will definitely ease the pain in our wallets during this holiday season.

If you have been stranded by your loan originator to survive on your own in a maze of changes, The Barath Group gladly accepts stranded clients and their mortgages. Contact us today. 

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