Even before the Iran deal was announced, market analysts were predicting that lower gas prices were on the horizon. Certainly, the optimism over the Iran deal has increased this speculation. In reality, the deal might help more Iranian oil get to western markets, yet we know that this agreement still has to go through the “political process.” That does not stop optimism, and CNN/Money recently published a story saying that we could see gas prices at $2.00 per gallon, especially after the summer driving season comes to an end.

Again, even without the deal being implemented, analysts were bullish on lower gas prices as world production was rising. The next question is–will that hurt or help our economy? On the plus side, lower gas prices should bolster consumer spending, while lowering the threat of inflation. This could help moderate future rate increases. On the negative side, our energy sector would be negatively affected and areas dependent upon those sectors would be hurting as well.

The overall effect would definitely be positive. We should remember that the energy sector affects all industries. There has even been a recent study that has indicated that falling gas prices can shorten the time it takes a house to sell and can increase the selling price. The study was published by Florida Atlantic University and Longwood University. We certainly understand that lower gas prices can affect demographics with more moving closer to cities when gas prices are higher. Will gas prices fall and by how much? That remains to be seen but the possibility is intriguing.

The Markets. Rates on home loans fell back last week to the level of two weeks ago. Freddie Mac announced that for the week ending July 23, 30-year fixed rates fell to 4.04% from 4.09% the previous week. The average for 15-year loans decreased to 3.21%. Adjustables were higher, with the average for one-year adjustables moving to 2.54% and five-year adjustables rising to 2.97%. A year ago, 30-year fixed rates were at 4.13%, close, but still higher than today’s levels. Attributed to Sean Becketti, Chief Economist, Freddie Mac — “U.S. Treasury yields dropped following announcements that many blue chip companies’ earnings failed to meet expectations. This drove the 30-year fixed rate loan down 5 basis points to 4.04 percent this week. Housing continues to be the bright spot in the economic recovery. Existing home sales beat market expectations coming in at a seasonally adjusted annual rate of 5.49 million homes. This is up 9.6 percent from a year ago and the fastest pace since 2007. Also, housing starts jumped 9.8 percent responding to strong demand in the multifamily market.” Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.  

 Home sales are on pace for their best year since 2007. First-time buyers are streaming back into the market. Prices are skyrocketing, aided by a stronger job market and tantalizingly low mortgage rates that are creating pressure for buyers to act fast. The resurgence is a sign that the U.S. economy — after muddling through a sluggish, six-year recovery — has re-discovered another source of growth. Buyers are more confident about their own prospects. But many also appear ready to close sales quickly because of concerns of being potentially priced out of the market by rising mortgage rates and home values. “What we’ve seen is that demand is off the charts in 2015 — and that is really boosting sales,” said Nela Richardson, chief economist at the brokerage Redfin. “Last year, buyers were dipping their toes in their water. Now, they’re diving in.” The National Association of Realtors said that sales of existing homes climbed 3.2 percent in June to a seasonally adjusted annual rate of 5.9 million. June was the fourth consecutive month of the sales rate exceeding 5 million homes. Median home prices climbed 6.5 percent over the past 12 months to $236,400, higher than the July 2006 peak. Employers have hired 3.1 million additional workers in the past year as the unemployment rate has slid to 5.5 percent from 6.3 percent. This influx of additional paychecks has led more Americans to feel financially secure after weathering the most severe downturn — sparked by a housing bust — since the 1930s. “Many buyers appear eager to finalize their purchases before rates and prices increase any further,” said Jonathan Smoke, chief economist at Realtor.com. Source: The Associated Press

RealtyTrac® released its May 2015 U.S. Home & Foreclosure Sales Report, which shows 24.6 percent of all single family home and condo sales in May were all-cash purchases, down from 28.5 percent in the previous month and down from 30.4 percent a year ago to the lowest level since November 2009. The cash sales share in May was close to its long-term average going back to January 2000 of 24.8 percent and well below its recent peak of 42.2 percent in February 2011. The share of institutional investors — entities purchasing at least 10 properties in a calendar year — dropped to 2.4 percent of single family home sales in May, a record low going back to January 2000, the earliest month with data available. “For the potential first time homebuyer or move up buyer this is a good time to move ahead,” said Craig King, COO at Chase International brokerage, covering the Lake Tahoe and Reno, Nevada, markets. “Interest rates remain historically low, and the outlook for price appreciation is great. The competition in the market place is also different. While inventory is tight, many investors have dropped out of the market and cash deals are not as prevalent as they were. This is great news for first time buyers.” Source: Market Watch

The U.S. is getting older — fast. Nearly 300,000 Americans are turning 65 each month; a decade from now, according to official projections, nearly one in five Americans will be what is typically considered retirement age. The graying of the population has huge implications for politics, the economy and society at large. But as new census data shows, those challenges aren’t equally distributed: Although virtually the entire country has grown older since 2010, some places are aging much faster than others. And some places have large working-age populations to help support their growing number of seniors, while others, particularly rural counties, do not. Big urban areas have seen strong job growth, and as a result have large working-age populations to support their seniors. More than two-thirds of New York’s Manhattan residents, for example, are in the 20 to 64 age group, and roughly half are in what economists consider the prime working years, 25 to 54. Most other big cities have similarly large working populations. By contrast, the oldest counties are concentrated in sparsely populated rural areas, particularly in the middle of the country. Source: The Data Lab