Do low oil prices hurt home sales?

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An oil pump jack in a field

06/16/2015 | Author: Editorial Staff

If you’re worried about lower oil prices and the effect on the state’s economy, there’s research that could put your mind at ease. While there is some relationship between the two, Jim Gaines, Ph.D., a research economist with the Real Estate Center at Texas A&M University, says historical data shows that this relationship is only correlation, not causation.

“They do tend to have some relationship to each other, but there’s nothing that says just because the price of oil goes from X to Y that the monthly home sales are going from A to B,” Gaines told Texas REALTOR® magazine

“Historically, the state has had substantial and strong home-sale activity even without extremely high oil prices,” he says. At the same time, there are cutbacks in the oil industry, which means job losses for some Texans. However, Gaines says there are other influences on the housing market, including employment growth in non-energy sectors, population growth, and low mortgage-interest rates.

Explore this topic in depth in Jim Gaines’s article, “Texas 2015 Housing Market and the Price of Oil” in Tierra Grande

Categories: Research
Tags: oil and gas, research, texas realtor magazine


John Lange on 06/18/2015

I recognize that lower oil prices have a general positive effect on the overall economy.  But tell that to the housing market in bedroom communities that are adjacent to major oil companies like Katy.

Relocation into this area is significantly lower, a statistic that may be measured months from now, but is affecting the market now.  Home builders, which had almost eliminated incentives to Realtors in the last several years, have begun adding incentives again.

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