The war with Iran has been going on for nearly a month, affecting Americans' budgets not only at the pump but also when buying a home.
“Crude oil prices are near their highest levels in nearly two years and that is what’s getting our attention in the U.S," said Kandace Redd, AAA spokesperson. "Price of crude oil has mostly traded in the upper $50s to mid $70s range since September of 2024.”
Now, it’s at about $91 per barrel, and gas prices are rising because they generally follow crude prices.
“That’s because 60% of what we pay at the pump is tied directly to the price of crude oil," Redd said. "Now, generally speaking, for every $1 increase in the price of crude oil, we typically see a two-cent increase in the price of gas at the pump.”
According to AAA, the national average for a gallon of regular is $3.97. California leads other states with an average of $5.82. In San Luis Obispo, the average is $5.94.
Before the conflict began, the national average was $2.98.
Home buyers are now also seeing the effects of the war on their pocketbooks.
“Typically, interest rates follow the price of oil, so interest rates are back up to pushing 6.5%. You can do better, maybe 6.35% to 6.5% on a 30-year mortgage,” said Dale Kaiser, Cayucos realtor.
Dale Kaiser Real Estate is based in Cayucos. He said that because it is more of a second-home destination, he hasn’t seen the impact locally, but can see it being a struggle in other places.
“Rates have probably gone up somewhere between three-quarters of a point and a point, and that weeds out a lot of potential buyers and makes it more of a struggle to get that mortgage,” Kaiser said.
He recommends that potential home buyers be fiscally conservative and buy when they can afford it.
