How Gas Prices Destroyed The Housing Market

Higher fuel costs drained money out of everyone's budget, and most people found out the hard way how gas prices destroyed the housing market, or at least contributed to it's downfall. Most everyone in the United States relies on gasoline to get to work, go to the store, go on vacations and those occasional weekend getaways. The American public works hard for their money. Never in history has this nation been without a reasonable costing fuel for their vehicles. High gas prices, even in the so called "gas shortage years" of the past decades, were never an issue. Only in the last few years were oil companies allowed to raise prices and make record profits while the rest of the economy, the housing market, and the rest of this great country suffered greatly. Greed and lack of restraint by the government allowed fuel prices to rise to over four dollars a gallon nation wide for the first time in history.

The American public went from paying around ten dollars a week to fill their gas tanks, to having to put forty, fifty, sixty, and even in some instances over one hundred dollars to fill their vehicle's gas tanks. Most working families live on a budget. If you have a budget that allocates ten dollars a week for gasoline for your vehicle (most families have two vehicles) that's forty to fifty dollars for your fuel expenses a month. This total annual gasoline fuel bill would cost you around $600 a year to allow you drive to work,  do your grocery shopping, and enjoy living in this beautiful country we call America. Now, take that same annual fuel cost of $600 and multiply it by four times, and that dollar a gallon gasoline budget of $600 for one vehicle all of a sudden became a four dollars a gallon gasoline bill with an annual cost of over $2400. You can easily see why the American public not only couldn't afford to purchase a new or existent home, they couldn't even afford to pay for the mortgages on the homes that they already lived in. This contributed greatly to destroying the housing market.

When fuel costs go up, unfortunately so does the cost of everything. Everything at one time or another, including the materials it takes to build a home, is transported and delivered by trucks. Trucks run on gasoline and diesel fuels. When the gasoline prices went up, the shipping companies that transport consumer goods and services raised their prices to help cover their higher fuel costs. This additional cost caused the the American public to pay their monthly bills with their credit cards because most of their hard earned money was going into their gas tanks. Over time, these additional costs caused the economy to drastically slow down. While the oil companies where enjoying all time record profits, the country was sinking into a recession, and eventually slid into a depression. This ultimately help lead to a worldwide economic crisis. The American public could no longer pay their monthly bills due to higher gasoline costs, and millions defaulted on their home mortgages, car payments, credit card payments, utility bills, and even on their medical bills. Most American's hard earned money that kept their families fed and housed, was now going directly into the oil companies pockets. You essentially paid the four dollars a gallon for gas, or you ran out of gas and couldn't drive to work.

Resource:

The Antiplanner