Price Drop Alert: These 4 Expenses Should Get Cheaper in 2024
On paper, 2023 was a solid year for the U.S. economy: Inflation slowed while unemployment stayed low, and the new year could will bring even more progress.
The annual inflation rate is projected to fall to 2.1% in 2024, just a notch above the Fed’s long-run target, according to a recent report from the Congressional Budget Office. Ask inflation-weary Americans how they feel about the economy, though, and you’d probably get two thumbs down.
Alas, consumers likely won’t be seeing the return to pre-2021 prices they might be hoping for in 2024. While Goldman Sachs’ 2024 outlook says that the hard part of the inflation fight looks like it’s over, Americans should expect more of a slowing of price growth called disinflation. In other words, inflation will continue cooling off over time — and that’s different from deflation, or a sustained drop in prices.
That said, forecasters expect a few goods and services in particular to finally see a little price relief this year. Here’s what’s expected to get cheaper as we head into 2024:
Gas Prices:
The yearly national average gas price is expected to drop from $3.51 per gallon in 2023 to $3.38 this year, according to price comparison app GasBuddy’s fuel price outlook. The year is starting out on a high note, with January expected to see 2024’s lowest prices at $3.11 per gallon on average.
Hoping to take a trip in 2024?
Last year, international travel saw a massive uptick as global COVID restrictions finally fell away. Those in need of a vacation may want to opt for a domestic trip: Travel booking app Hopper anticipates that domestic airfare will be much cheaper than 2023 — and even pre-pandemic prices — over the next 6 months.
Electric Vehicle Prices:
Between record-breaking new and used car prices and rising auto insurance premiums, car buyers have had a rough go at it the past few years. But sales of electric vehicles increased in 2023 thanks to EV tax credits and an oversupply at dealerships — and as customer acceptance continues to grow, automotive services company Cox Automotive expects dealers will start pushing more incentives and discounts to entice buyers.
Housing Market:
Record-breaking mortgage rates and housing prices stonewalled homebuyers in 2023, resulting in a slump in sales and last-minute cancellations of deals. The new year isn’t looking like it will be much better, but prices and mortgage rates may cool off a bit, according to a housing market forecast from brokerage Realtor.com.
With inflation expected to continue falling 2024, the Fed will likely start cutting interest rates by the end of the year. Realtor.com experts forecast mortgage rates will drop to 6.8% on average and reach 6.5% by December. Rates reached a high of 7.79% in 2023, so that’s a significant improvement (albeit nowhere close to the 4% average between 2013 and 2019).
As we head into 2024, Americans can look forward to some relief in a few key areas. Gas prices, domestic airfare, electric vehicle prices, and housing costs are expected to see a decrease, providing some much-needed respite for consumers. While the overall economy is projected to show signs of disinflation rather than deflation, these price drops can help ease the burden on American wallets.
Whether you’re planning a road trip, booking a flight, shopping for a new car, or considering a home purchase, keep an eye out for these potential price decreases. It’s a positive start to the new year and a hopeful sign for a brighter financial outlook for many Americans.
