15 Oct How does our raising gas prices effect real estate?
How does our raising gas prices effect real estate?
The price of a barrel of oil today is $82.22. This is the highest price since 2014. This translates directly to the pump and what you pay for your gas. I am sure you have noticed the spike in gas prices recently and there looks to be no end in sight for the near term. As our economies begin to get back to normal getting production back to pre-pandemic levels is lagging.
How does this affect us besides at the pump?
Gas prices effect all your goods since the products you need are transported to the store. The added cost of that transportation because of the increase in gas is passed on to the merchant who then passes it on to the consumer.
Where are we at right now with inflation?
The Labor Department said last month our consumer-price index rose 5.4% for what consumers pay for goods and services compared to a year earlier. If you take out the often-volatile categories of food and energy it climbed 4%.
What will the Federal Reserve do to combat inflation?
The Federal Reserve released minutes on Wednesday that showed they are worried about the disruption of supply chains (the ability to get goods to the markets) and that this will raise the risks of inflation. They also firmed their plans to conclude their bond-buying stimulus program by the middle of next year which has kept interest rates down.
How will this effect real estate?
In a couple of ways, one it could push up the price of new construction if materials needed to build are hard to get and more expensive and most importantly it will pressure the Federal Reserve to raise interest rates. This will affect how the house you can afford and effect the buyers and sellers in Minnesota.
If you have any questions about how our raising gas prices effects real estate…do not hesitate to contact me.
I hope the blog on this subject was helpful.
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Please reach out to me if you have questions about housing in Minnesota at 612-386-8600. Look for more articles and videos in the future on different aspects of real estate and our state of Minnesota.
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Real estate is a wonderful investment!
Jeff Anderson
The Anderson Team
www.mnrealestate.com
RE/MAX Results
612-386-8600
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