For home-owning, car-loving Americans, prices are moving the right directions.
As the holiday week begins the average price for a gallon of unleaded regular gasoline is close to $2.50 per gallon. According to the U.S. Energy Information Administration, U.S. pump prices haven’t been this cheap since the weeks leading up to Halloween of 2009.
There are plenty of reasons behind the price drop: American energy supplies increasing, global energy demand decreasing, and the U.S. dollar rally among them. The result is more cash in the pockets of shoppers during the holiday buying season. It’s estimated that every penny drop at the pump is $1billion Americans don’t have to spend on gasoline.
For those drivers who are homeowners, they also may feel richer. Home prices continue climbing. Median prices for existing homes were higher in October across every region of the country compared to a year earlier. It’s the same for prices of new homes. The November data will be released Monday and Tuesday. The pace of sales may slow but prices are expected to continue higher.
Academic research has found a powerful positive connection between housing market wealth and household spending. Coupled with falling gas prices, consumers’ belief in their prosperity is a powerful of economic stimulus for the United States even as other places in the world struggle.
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami.
Follow him on Twitter @HudsonsView.