WHAT COULD POSSIBLY GO WRONG?
Financial hopes and dreams in the making
Mexico is a leading exporter of oil to the U.S. while also being a leading importer of U.S. gasoline. If U.S. gas exports decrease due to a trade war, that excess supply could drive gas prices down even more.
It’s all downhill from here...
According to travel group AAA, we’ve probably already seen the highest gas prices of the year. In a June 5 report, AAA said that the recent declines in oil prices would mean $0.10 less per gallon on average, versus last year. At the time of the report, the national average for regular unleaded gasoline was $2.79 a gallon... That’s down from $2.89 in May, and $2.94 a year ago. That’s because crude oil prices are roughly $13-$20 cheaper than last summer... Futures prices for West Texas Intermediate crude (WTI) – the U.S. benchmark – were $51.68 a barrel. That’s the lowest price since January, according to Dow Jones Market Data. With prices down 22% from their most recent high in April, the dip marked WTI’s fall into a bear market. AAA also warned that trade tensions with Mexico could have an impact... but in a good way.
Mortgages hit a 2-year low...
This month, the average interest rate for 30- year fixed-rate mortgages fell to 4.23% from 4.33%, the lowest level since January 2018. In response, many homeowners are rushing to refinance their mortgages, but the low borrowing costs aren’t exciting new and first- time buyers. Despite mortgage refinance activity increasing from 39% to 42% of total applications, new home mortgage applications fell about 2%... only 0.5% higher than a year ago. The Mortgage Bankers Association (MBA) attributes this disparity to higher home prices and a shortage of entry-level homes. For many buyers, the housing prices aren’t worth the lower mortgage rates...
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