Gas prices are entering a very similar pattern to 2006 across the United States and — while it’s bad news for motorists — it could be bad news for mortgage rate shoppers, too.
Last summer, gas prices averaged more than $3.00 per gallon for three main reasons:
- Fear of supply reduction from the Middle East
- Fear of a repeat of the 2005 Hurricane Season
- Seasonal demand factors
Mortgage rates skyrocketed last summer because higher oil prices permeated the entire economy — consumers and businesses alike — and the cost of living increased for Americans.
Looking at the chart above, we may be in for a similar Summer Swoon.
Gas prices are mirroring last year’s prices in late-April and not much has changed in the Middle East in the past 12 months.