Mortgage Applications Hit 28-Year Low
The Calculated Risk chart below shows the latest data from the Mortgage Bankers Association (MBA), and both the applications and the purchase index were 2-3% lower week-over-week. The purchase index was 28% lower vs. last year. Despite 30-year mortgage rates being slightly lower, lack of new housing inventory has prices elevated, and coupled with higher interest rates, it has new buyers staying out of the market.
Gasoline Prices Highest for September in a Decade?
Something is broken. Joe Weisenthal at The Stalwart made an interesting observation. Using September 6th as the check date, gasoline prices are the highest in a decade.
Now, these are not the highest gasoline prices recently. Prices averaged $5.00 a gallon at the beginning of the war in Ukraine. Fear that it would lead to a global oil shortage impacted prices, and those prices rippled through the refining industry. Stripping out the start of the war, prices are their highest since the 2011-2014 period.
The question is what will happen further down the road, and that’s where the chart below from The Stalwart comes in. Prices have quietly snuck up, and they are now at their highest levels in a decade (for this time of the year). The question is this: what can bring them down except a collapse in demand? Refining isn’t going to suddenly surge, and oil prices are going higher, not lower.
Even the EIA is increasing its price outlook for petroleum/refined fuels. That outlook is likely a bit low, but it forecasts crude oil prices averaging $79.24 in 2023 (up from $77.10 in the last EIA Short-Term Energy update). Oil prices are volatile, and 2024 prices are expected to average $75.21 according to the EIA
The EIA also predicts that diesel prices will average $4.11 a gallon in 2023 ($4.17 in last month’s outlook). The outlook for 2024 currently shows diesel at $3.87 ($3.73 in the last update).