### Summary
Millions of households in the UK are expected to see relief from high energy prices as typical gas and electricity bills are set to drop below £2,000 this autumn under regulator Ofgem's energy price cap.
### Facts
- 💰 Gas and electricity costs for average homes are projected to fall to £1,925 from October, according to industry analysis.
- 💨 The energy price cap is designed to ensure that consumers benefit from lower prices when they fall, but allows suppliers to increase prices when wholesale costs rise.
- 🔽 The predicted drop in prices marks the first time that typical bills will be below £2,000 since last summer.
- ⚡ The cap currently applies to around 29 million households on standard variable tariffs.
- 💲 Falling wholesale prices have led to a decrease in the Ofgem cap from £4,000 to £2,074 in July, eliminating the need for government subsidies.
- 📉 Cornwall Insight predicts that typical bills could fall even further to £1,823 due to lower estimates of household energy usage.
- 📈 However, energy prices may rise again at the beginning of next year due to a recent increase in wholesale gas prices.
Despite high interest rates, house prices in the US have not declined, leading to frustration and confusion in the housing market as buyers face fierce competition and limited inventory.
Zillow predicts that US home prices will continue to rise, with a 6.5% increase over the next 12 months, driven by tight inventory levels and high demand, while other firms like Moody's Analytics and Morgan Stanley believe there may be a decline in home prices by the end of 2024.
Oil prices slightly decrease as concerns over China's economic growth and potential U.S. interest rate hikes weigh on fuel demand.
Copper prices may experience a significant price spike over the next three years due to its critical role in electric vehicle batteries and other green energy technologies, making it a potential alternative to oil as the world moves away from fossil fuels.
Home prices in the U.S. rose for the fifth consecutive month in June, despite high mortgage rates, with national prices increasing by 0.9% and only down 0.02% from their peak in June 2022, according to the S&P CoreLogic Case-Shiller index. However, there were significant regional differences, with cities on the West Coast experiencing some of the biggest declines. The housing market continues to face challenges due to low inventory and slow new construction.
British home prices are expected to fall by 4% this year due to high interest rates and living costs, despite the shortage of supply, according to a Reuters poll, with potential buyers being kept out of the property market; however, prices are expected to recover from 2024.
The number of homes for sale in the US continued to decline in August, down by 9.2% compared to the previous year and 45% below pre-pandemic levels, leading to higher home prices and affordability concerns.
Home prices, which had been steadily rising since January, may be starting to decline again due to weakening month-to-month gains and higher mortgage rates.
Rapidly falling house prices have caused a "cost of owning crisis," with tens of thousands of homeowners falling into negative equity over the past year, making it difficult to sell or remortgage properties. Experts predict that more households will face difficulties as house prices continue to decline, with the Government's tax and spending watchdog expecting a 10% fall in prices. However, there are expectations of a rebound in house prices in the future, particularly for those intending to live in their homes for several years.
Mortgage rates remain elevated, slowing housing market activity, and while home prices are not likely to fall significantly, rates are projected to decrease in 2023 and 2024.
Despite a recent slump, research firms including Freddie Mac, Zillow, and the National Association of Realtors predict that home prices will continue to rise in 2024 due to a shortage of housing inventory and strong demand, with NAR forecasting a 2.6% increase. However, Moody's Analytics and Morgan Stanley expect home prices to slightly decrease in 2024 due to declining affordability and increased housing supply.
The United States housing market has seen a 21 percent decline in previously occupied home sales over the past year, continuing the slowdown caused by rising interest rates, while prices continue to rise despite the decrease in sales, leading to a shortage of affordable homes and worsening home affordability for the foreseeable future.
Experts are divided on the future of US home prices, with some predicting a surge and others expecting a decline, as homeowners are reluctant to sell their homes with cheap mortgages and buyers are hesitant to overpay. Jeremy Grantham believes prices will come down by 30%, while Barbara Corcoran predicts a surge of 15% to 20% once interest rates decrease. David Rosenberg forecasts a recession and a potential 25% plunge in house prices, while Glenn Kelman believes the housing market has hit rock bottom. Vincent Deluard expects prices to drop when homeowners eventually sell.
As the US housing market starts to cool down, homebuyers are being presented with a good opportunity as more homes see price reductions, according to Zillow, with 9.2% of listings having a price cut in the week ending September 16, a higher rate than in 2019.
Summary: Oil prices drop over 2% as a result of a strong U.S. dollar, profit-taking, inflationary concerns, and forecasts of increasing supply, as well as the World Bank's forecast of slower Chinese growth.
Gasoline prices are expected to drop significantly as crude oil prices decrease and demand remains low, with many areas already seeing falling prices due to the production of less expensive winter grade fuel and the lowest seasonal demand levels in 25 years.
Gas prices in the US have been falling, with the nationwide average dropping 7 cents in the past week and expected to decrease even further, potentially falling by 50 cents by the end of the month, due to a decrease in the cost of crude oil and a decline in demand.
Sentiment in the US housing market declined due to rising mortgage rates, with buyers anticipating higher home prices in the future, according to Fannie Mae data.
The rapid decline of US inflation may not last due to potential upside risks in categories like used cars and airfares, raising concerns about whether price pressures in services components such as housing can slow down enough to sustain the downward trend.
The average transaction price for new electric vehicles in the US has dropped over 22% compared to last year, driven by Tesla's price cuts, leading to increased demand and growth in EV sales.
Gasoline prices in the US are continuing to decline despite a 5% increase in crude oil futures since the start of the Israel-Hamas war, primarily due to the switch to a cheaper winter blend driving fuel and lower seasonal demand, as well as increased refined products supply and higher inventories compared to last year.
Rent prices in the western states of the U.S. have seen significant declines, with Montana experiencing the largest drop of nearly 15.5% year over year, as the rental market adjusts to a slowdown in the housing market amid rising mortgage rates; however, demand for rental units is still expected to remain strong through 2023.
Fuel prices in the US have fallen this month, but the declines are not as significant as they would have been without the risks to oil supplies in the Middle East caused by the Israel-Hamas conflict, according to analysts. Gasoline prices may fall another 20 cents per gallon if there are no broader hostilities in the region, but if conflict escalates, prices could sharply rise. Diesel prices are at historically high levels due to low global supply and could increase further if the war expands.
The US housing market is experiencing a significant decline in existing-home sales, with September seeing a 15% drop compared to the previous year, due to factors such as high mortgage rates, low inventory levels, and rising home prices.
Rent prices in Austin, Texas have decreased by more than 14% in the past year, making it the U.S. city with the largest decline, attributed to increased vacancy rates and favorable market conditions for renters.
If mortgage rates stay at their current level, home prices could drop by as much as 5% next year, according to Morgan Stanley, and if rates remain close to 8%, it could have an even more negative impact on home prices in the long term.
Rent prices in the US have dropped for the fifth consecutive month, favoring renters over buyers, due to a rise in home prices during the pandemic and an increase in mortgage rates; however, rent prices are still higher than pre-pandemic levels, with studios, one-bedroom apartments, and two-bedroom apartments experiencing an overall year-over-year decline of 0.7%.
World shares and oil prices are declining ahead of an update on the US economy, with high interest rates taking a toll on stocks and the housing market, and uncertainty over the economic outlook impacting global markets.
Mortgage rates may see a slight decline in 2024, potentially offering some relief for homebuyers, due to possible rate cuts by the Federal Reserve, decreasing inflation, and a cooling job market.