‘On the right path’: Housing market offers glimmers of hope, some analysts say
Phillip Spears/Getty Images
(NEW YORK) — A thaw in the housing market may deliver relief for homebuyers left out in the cold over recent years, analysts told ABC News.
After the pandemic, a rapid rise in home prices coincided with stubbornly high mortgage rates, shutting out potential buyers.
Glimmers of hope have started to emerge, however. Mortgage rates are falling, wages are rising faster than home prices and homebuyers are scooping up their biggest discounts in years, some analysts told ABC News.
“Housing is becoming more affordable. Are we there yet? No. But we’re on the right path,” Ken Johnson, a real estate economist at the University of Mississippi, told ABC News.
The average interest rate on a 30-year fixed mortgage stands at 6.09%, Freddie Mac data last week showed. A little more than a year ago, the average 30-year fixed mortgage rate exceeded 7%.
Each percentage point decrease in a mortgage rate can save thousands or tens of thousands in additional costs each year, depending on the price of the house, according to Rocket Mortgage.
“It looks like mortgage rates are settling down,” Lawrence Yun, chief economist at the National Association of Realtors (NAR), told ABC News. “That’s great news for homebuyers.”
A measure of housing affordability issued by NAR has improved for seven consecutive months, rising to its highest level since 2022, Yun said. The surge in home prices has slowed while income gains have accelerated, bolstering the purchasing power of homebuyers, some analysts noted.
“Incomes are growing faster than home prices,” Johnson said.
Despite these positive signals, the housing market still faces significant challenges, some analysts said, pointing to a fundamental shortage of housing supply.
The housing market is suffering from a phenomenon known as the “lock-in” effect, Lu Liu, a professor at the Wharton School at the University of Pennsylvania, told ABC News.
While mortgage rates have fallen, they remain well above the rates enjoyed by most current homeowners, who may be reluctant to put their homes on the market and risk a much higher rate on their next mortgage.
“The degree of lock-in is unprecedented in the U.S.,” Liu said, noting the prevalence of 30-year mortgages and the inability for homeowners to transfer a current loan to a new property.
Existing home sales declined by 8.4% in January from the previous month, the NAR said in a report last week.
Alongside the lock-in effect, construction has failed to make up for a years-long shortage of new homes, exacerbating the shortfall.
While the lock-in effect remains a significant factor, its impact may be waning as some home owners encounter major life events or other circumstances that force them to move, even if it entails taking on a loan with a higher mortgage rate, Liu said.
“If they really do have to move, maybe they would be more willing to yield to this economic logic,” Liu added.
If homebuyers do move forward with a purchase, they may benefit from major price discounts, Redfin found this month. In 2025, homebuyers received average discounts that amount to 7.9% off a home’s initial listing price, Redfin said, making it the largest average discount in 13 years.
“Homebuyers are more likely to get discounts than they were in recent years because it’s the strongest buyer’s market in recent history,” said Lily Katz and Asad Khan, co-authors of the Redfin report.
Positive signals for homebuyers will likely continue as elevated mortgage rates weigh on consumer demand, slowing the rise in prices, some analysts said. But, they cautioned, an unexpected spike in mortgage rates could hike borrowing costs for homebuyers or an economic slowdown may crimp purchasing power.
“There is uncertainty over the outlook for interest rates,” Liu said. “So the overall price outlook is uncertain.”
A sign displays the prices of unleaded gasoline and diesel fuel at a Chevron gas station in Los Angeles on Monday, May 4, 2026. (Kyle Grillot/Bloomberg via Getty Images)
(LOS ANGELES) — A Chevron gas station in Los Angeles elicited headlines in recent weeks for charging an eye-popping $8.71 a gallon, becoming an emblem for the spike in fuel costs set off by the Iran war.
Sky-high gas prices nationwide owe primarily to a historic oil shock that followed Iran’s effective closure of the Strait of Hormuz. But a lesser-known contributor helps account for just how high prices have gotten, at least at some name-brand stations selling fuel from the likes of Chevron, Shell and ExxonMobil.
Branded stations, which make up almost half of gas stations nationwide, charge about 6 cents more per gallon on average than their unbranded counterparts, according to data from the Oil Price Information Service (OPIS), a Dow Jones company, for the week ending on May 2. That price gap marks little change from where it stood before the war, OPIS data showed.
In at least one state, the price disparity runs significantly higher. Gas at a Chevron station in California costs an average of 48 cents more per gallon than the price at an unbranded station, the California Energy Commission (CEC) found in 2024. After Chevron, the most expensive average gas prices in California were found at Shell, 76 and Arco-branded stations, the CEC said.
Some analysts said the higher price of branded gas is due to additional costs, such as proprietary additives in the fuel, as well as a producer’s marketing budget and the payment forked over by stations for guaranteed access to its gas – costs that are passed on to consumers.
Other analysts and a California state watchdog, however, have said that the price disparity may stem from the market dominance of a handful of companies, allowing them to drive up the retail price.
The scrutiny comes as some large oil companies like British Petroleum, Valero and Marathon Petroleum report soaring profits amid the Iran war, though Chevron and Exxon saw profits decline due in part to one-time paper losses stemming from financial hedges meant to protect them against a possible price drop.
The price of an average gallon of gas currently stands at $4.52, an increase of $1.54 per gallon since the war began on Feb. 28, AAA data showed. That amounts to a nearly 52% jump in about two-and-a-half months.
Patrick Penfield, a professor of supply chain practice at Syracuse University, said the recent surge in prices could prompt a reexamination of the costs baked into the price at the pump, including the added charge for branded gas.
“When you see such big price increases for gasoline, everything should be looked at,” Penfield said.
Chevron did not directly respond to an ABC News request for comment. However, Jim Stanley, director of media relations at the Western States Petroleum Association, a industry trade group, contacted ABC News at Chevron’s request.
Drivers choose branded gas stations as a matter of customer preference centered on issues like lighting, bathroom cleanliness or location, Stanley said.
“Any branded product – whether it’s medication or groceries or clothing – is going to generally cost more than a generic alternative,” he added.
Stanley further said roughly 95% of branded gas stations operate as franchises, meaning they enter into agreements with big-name companies but retain self-ownership.
“Branded gas stations can have these brand standards that they hold their franchisees to: a higher standard than an independently owned store,” Stanley added.
Kelly Davila, a spokesperson for Exxon, said the company doesn’t “own or operate our retail stations.”
Shell declined to respond to ABC News’ request for comment.
Phillips 66, the parent company of 76, did not respond to ABC News’ request for comment. Neither did Marathon Petroleum, the parent company of Arco.
Branded gas stations account for about 45% of stations nationwide, selling gas under the name of a major fuel company, OPIS data shows. Each of the brands touts a unique blend of additives that it says improves the gasoline and eases its effect on car engines. The extra ingredients go beyond the minimum standards mandated by federal and some state regulators, Denton Cinquegrana, chief oil analyst at Dow Jones Energy, told ABC News.
“At the end of the day, all gasoline has to meet a federal standard,” Cinquegrana said. “The branded gasoline goes above and beyond that minimum requirement.”
Higher prices charged by name-brand stations – a dynamic that stretches back decades – can be traced in part to spending on the development and production of the additives, Cinquegrana added: “They’re trying to recoup some of that investment.”
Some analysts, however, said it remains unclear whether the added ingredients deliver a meaningfully improved product.
“Regardless of each company’s claim, there is not sound evidence supporting the fact that additives do indeed improve the quality of gasoline, at least to the extent that the consumers perceive it to,” a study issued by the non-profit RAND corporation found in 2010.
The California Division of Petroleum Market Oversight (DPMO), a state watchdog agency, last year said it was “unable to independently verify claims that branded gasoline is superior to unbranded gasoline.”
When asked about studies disputing the value of additives, Stanley, of the Western States Petroleum Association, declined to comment.
The higher price of branded gas also owes to marketing budgets borne by the big-name companies as well as elevated costs paid by retailers as part of agreements with the brands that guarantee them priority access in the event of a supply shortage, the U.S. Government Accountability Office said in a study of the issue published in 2005.
“Gas stations pay more for a contract for branded gasoline because they have a guarantee of supply. And they have a major global brand backing them up,” Cinquegrana said.
Some analysts and a California watchdog disputed those explanations. Rather, they said, the higher prices may reflect market power enjoyed by the large firms, giving them leeway to raise prices without fear of competition.
“My own reading of the data is that the branded companies are able to take advantage of a lack of a competitive market and are acting almost like an oligopoly,” Paasha Mahdavi, a professor of energy governance and political economy at the University of California, Santa Barbara, told ABC News, using a term that describes an industry dominated by a small number of companies.
Mahdavi focused on the relatively large price gap in California between branded and unbranded gas, which has widened in recent years.
In 2019, branded gas from companies like ExxonMobil, Arco, Valero and Chevron cost an average of 20 cents more per gallon in California; within five years, that price disparity had climbed to 31 cents, according to a DPMO study issued last year. Over that same period, the profitability of oil refiners in California has increased, DPMO said.
The rise in refinery profitability may be traced to the “exercise of market power by gasoline suppliers,” DPMO added, saying 90% of in-state refining capacity is controlled by four companies. As a result, elevated wholesale prices could be passed along the supply chain, DPMO said.
The largest companies appear to have “pretty strong control of not only upstream assets like oil and gas, but also control of the gas stations that are preferred by consumers based on location,” Mahdavi said. “They’re able to charge a higher premium.”
Valero did not respond to ABC News’ request for comment.
Stanley, of the Western States Petroleum Association, said he is unsure why California features a larger gap in price between branded and unbranded gas than other states. One contributor, he said, could be the relatively low density of gas stations in the state.
“Competition brings down costs. When a retailer doesn’t see that same level of competition, you can see that reflected in higher prices.”
Stanley faulted environmental regulations in California for high overall gas prices.
“Branded or unbranded, gas in California is the most expensive in the country. That’s because of supply constraints that have been created by state policies.”
Mahdavi further said that the locations of branded gas stations may carry additional costs due to higher rents, accounting for some of the price gap.
The rise in prices during the Iran war offers an opportunity to revisit the factors that contribute to the price at the pump, according to Mahdavi.
“We can shine more light on what is driving these higher prices,” he said.
Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, US, on Wednesday, Jan. 28, 2026. (Photographer: Kent Nishimura/Bloomberg via Getty Images)
(NEW YORK) — The U.S. economy lost jobs in February, marking a major reversal of fortunes for the labor market and nearly erasing all of the job gains delivered a month earlier, government data on Friday showed. The reading came in well below economists’ expectations.
The U.S. lost 92,000 jobs in February, according to the report from the U.S. Bureau of Labor Statistics (BLS), which marked a significant dropoff from 130,000 jobs added in the previous month.
The unemployment rate ticked up from 4.3% in January to 4.4% in February, the BLS said. Unemployment remains low by historical standards.
The new jobs report arrived as markets roil and gasoline prices surge in response to the war with Iran. The Middle East conflict cast fresh uncertainty over the economic outlook.
A hiring cooldown last year prompted interest rate cuts at the Federal Reserve and concern among some observers about the nation’s economic prospects. The U.S. added an average of about 15,000 jobs per month in 2025, U.S. Bureau of Labor Statistics data showed.
Sluggish hiring has coincided with elevated inflation, threatening a period of “stagflation.”
Those economic headwinds helped set the conditions before the outbreak of war with Iran, which spiked oil prices and risked price increases for a host of diesel-fuel transported goods.
The Dow Jones Industrial Average plunged 785 points on Thursday as U.S. crude prices rose to their highest level since June.
Still, the overall economic picture remains mixed.
A government report in February on gross domestic product (GDP) showed the economy grew at a tepid annualized pace of 1.4% over the final three months of 2025. That reading indicated a dramatic cooldown from the strong annualized growth of 4.4% recorded in the previous quarter, U.S. Commerce Department data showed.
Price increases, meanwhile, have softened. In January, inflation fell to 2.4%, its lowest level in nine months. It remains slightly higher than the Federal Reserve’s target rate of 2%.
The Iran war threatens to slow U.S. economic growth since oil-driven price increases could weigh on consumers and businesses, analysts previously told ABC News.
The potential combination of higher inflation and slower growth could also pose a challenge for the Fed, putting pressure on both sides of its dual mandate to manage prices and maintain maximum employment.
If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but risks a cooldown of economic performance.
The central bank held interest rates steady at its most recent meeting in January, ending a string of three consecutive quarter-point rate cuts. Policymakers will make their next interest-rate decision on March 18.
Traders work on the floor of the New York Stock Exchange, March 31, 2026 in New York City. (Spencer Platt/Getty Images)
(NEW YORK) — Stocks ticked lower in volatile trading on Thursday after President Donald Trump delivered a televised address vowing to hit Iran “extremely hard” over the coming weeks.
The Dow Jones Industrial Average fell 75 points, or 0.1%, after opening down by 600 points, while the S&P 500 dropped 0.06%. The tech-heavy Nasdaq declined 0.1%.
Each of the major indexes tumbled more than 1% in early trading, but they quickly recovered most of those losses.
The rollercoaster trading followed losses across Asian and European markets. Tokyo’s Nikkei 225 index slipped 2.3% and the pan-European STOXX 600 fell 0.6%.
Oil prices, meanwhile, surged as traders feared a persistent supply shortage amid the ongoing U.S.-Israeli war with Iran. U.S. oil prices climbed more than 10% on Thursday, registering about $111 a barrel.
Gasoline prices in the U.S. ticked up to $4.08 on average per gallon, marking a leap of $1.09 over the past month, AAA data showed.
Speaking at the White House on Wednesday, Trump voiced mixed messages about his plans for the Middle East conflict. He said Iran is no longer a threat to the U.S. and the war in Iran is “nearing completion.” However, he added, the U.S. plans to continue striking Iran over the next two or three weeks.
“We’re going to bring them back to the stone ages where they belong,” Trump said.
The trading volatility on Thursday interrupted an upswing for markets earlier in the week. On Tuesday, the Dow Jones Industrial Average soared more than 1,100 points, adding another 220 points on Wednesday as traders anticipated Trump may signal an off-ramp from the war in his evening remarks.
Since the war with Iran began on Feb. 28, Trump has issued conflicting signals about the expected duration of the war. On several occasions, stocks have climbed or fallen as markets weighed the implications of Trump’s comments.
The war prompted Iran’s effective closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of the global oil supply.
The vast majority of fuel delivered through the strait is bound for Asia, placing the heaviest pressure on energy supply in that continent. Since oil and gas are sold on a global market, however, the shortage has sent prices rising for just about everyone.
On Wednesday night, Trump urged other countries to take responsibility for reopening the strait.
“The countries of the world that do receive oil through the Hormuz Straight must take care of that passage,” Trump said. “We will be helpful, but they should take the lead in protecting the oil that they so desperately depend on.”
A potential U.S. exit from the war without ensuring that the strait is open could cast uncertainty over the path to a resumption of normal tanker traffic and a remedy for the current global oil shortage.
