The economic news seems dire, to say the least: home prices taking their steepest fall in May—ever! As in, ever!
The Standard & Poor’s /Case-Shiller index of 20 cities dropped 15.8 percent in May compared with last year, reports the Associated Press.
And, that is an average, of course.
Las Vegas, for example, had home prices drop 28.4 percent in May.
But the current and somewhat related energy crisis may help provide a sort of blueprint on how to lift ourselves out of this credit,mortgage,housing debacle.
Consumers strike back!
After week upon week of a steady drumbeat of seemingly perpetually rising oil and gas prices, oil has now actually dipped to a seven week low, down more than $2 a barrel! And gas prices at the pump are also moving in a downward direction.
What happened is the American consumer got fed up and revolted.
According to the U.S. Transportation Department, drivers in the U.S. logged almost 7 billion fewer vehicle miles in May, the biggest drop ever recorded during the normally gas guzzling summer vacation season.
To be sure, there are other factors at play—a stronger dollar, for one thing, that are having an effect on the price of oil.
But, at the end of the day, it appears pretty simple–Americans are driving less and using less fuel and that is primarily what is responsible for the fall- off in the price of oil.
The mortgage/credit mess is admittedly a much tougher challenge. Having said that, what is happening with oil may be showing us the light at the end of the tunnel?
More and more foreclosed houses are now on the market–but fewer and fewer people can afford to buy them because credit is so damn tight. But there will come a point when banks (if any remain standing?) will have to lower their credit barriers or risk permanently losing potentially lucrative customers.
Can consumers, then, help turn this around for the good? Yes–we can!!