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There has been a discussion going on for quite some time in the media about what the recent decrease in gas prices means for our economy. On the surface, the lowering of gas prices seems like it would be a good thing across the board.
Obviously, it's better consumers because they have to spend less money on gas and therefore have more discretionary income to spend on other things or to invest in their future.
But gas is also good for businesses. Many have speculated that lower gas prices will lead to more shopping. If people feel like they can get out and about more, they will spend more money because they won't stay at home.
Then, there is the other side of the issue. Some have suggested that the recent change in gas prices is a ploy by OPEC to price domestic produces of oil out of the market. In the short run, it's good for American business and consumers. But, in the long run, it could raise prices even higher if foreign produces gain even more leverage.
I'm not sure what is really going on behind the scenes. I'm not an economist, but I can offer input about what gas prices mean for the mortgage industry. If it's going to have an impact on housing, I think the lower prices need to be sustainable.
People aren't going to be willing to invest in the futures without the confidence that prices won't shoot back up. In the mortgage industry then, we shouldn't be lobbying for lower gas prices--we should be arguing for sustainably lower gas prices.
David Lykken is 40-year mortgage industry veteran who has been an owner operator in three mortgage banking companies and a software company. As a former business owner/operator, today David loves helping C-Level executives and business owners achieve extraordinary results via consulting, coaching and communications, with the objective of eliminating corporate dysfunction, establishing and communicating a clear corporate strategy while focusing on process improvement and operational efficiencies resulting in increased profitability. David has been a regular contributor on CNBC and Fox Business News and currently hosts a successful weekly radio program, “Lykken on Lending,” that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. He produces a daily one-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper Web sites across America. He may be reached by phone at (512) 501-2810 or by e-mail at [email protected]am.com.