The U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.13 per gallon – its lowest point since a peak of $4 per gallon in May 2011. EIA estimates that the savings could amount to $550 per household in 2015. The drastic drop in oil prices could put downward pressure on mortgage rates.
"Lower oil prices mean a lower inflation rate, which pushes down mortgage rates," economists note at the National Association of Realtors®' (NAR) Economists' Outlook blog. Indeed, the 30-year fixed-rate mortgage averaged 3.66 percent last week – the lowest average in 20 months – according to Freddie Mac's weekly mortgage market survey. Taking into account the median home price of $205,300, a 0.75 percentage point drop in mortgage rates could yield a savings of about $1,000 annually, according to NAR researchers.
Source: "Recent Oil Trends and What They Mean for the Housing Recovery," National Association of REALTORS® Economists' Outlook Blog (Jan. 12, 2015)
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