Gas prices continue to plummet, but that isn't necessarily all good news for consumers. Find out more.
The national average gas price has continued to creep downward since it hit a seven-year low of $1.99 per gallon last month.
As of today, it’s less than $1.96 per gallon, according to AAA’s Daily Fuel Gauge Report — but that’s a mixed blessing for residents of certain parts of the country.
In some states, gas is nearly as cheap as water from a store, and heating prices have fallen along with gas prices. In other states, however, home values could drop along with falling oil prices.
For example, the cost of gasoline at a Sam’s Club in Oklahoma City is 0.87 cents per ounce before state gas taxes, while the cost of Dasani bottled water at the same store is 0.74 cents per ounce, CBS MoneyWatch reports.
In many parts of the Northeast, home heating oil costs well below $2 per gallon — compared with $3.80 to $4 per gallon two years ago, CBS reports.
In states whose economies are tied to the energy sector, however, falling energy prices could lead to layoffs and, in turn, lower demand for housing, CNN Money reports.
Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors, explains to CNN Money:
“Fewer jobs means less home buying demand and that will naturally soften the housing markets in those job-impacted areas.”
Arch Mortgage Insurance refers to the states whose economies are most closely tied to the production of oil, gas or coal as “Energy Patch” states.
According to the latest quarterly Arch MI Risk Index, the average likelihood of home price declines nationwide over the next two years remains at 6 percent, which the company describes as “consistent with our baseline forecast of continuing growth in employment, home sales, construction and home prices.”
But the report continues:
“The exceptions to the rosy forecast are all in the Energy Patch states.”
According the index, those states at the greatest risk of seeing home price declines over the next two years are:
- North Dakota — 46 percent (considered an “elevated” risk level)
- Wyoming — 37 percent (elevated)
- West Virginia — 33 percent (elevated)
- Alaska — 33 percent (elevated)
- New Mexico — 31 percent (elevated)
- Oklahoma — 28 percent (moderate)
- Louisiana — 28 percent (moderate)
- Texas — 26 percent (moderate)
- Mississippi — 8 percent (low)
- Hawaii — 3 percent (low)
All other states have a “minimal” risk level of 2 percent or less.
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