WICHITA, Kan. (KSNW) – There are now record-high gas prices, mortgage rates that are at their highest point in more than the last decade, and the war in Ukraine that is driving up the demand and prices in the world market. Is this another repeat of 2008?
In the year 2008, the U.S. was fighting two wars, the housing market was hot, and gas prices were also more than $4 a gallon across much of our country.
On Tuesday, AAA reported a new record high in gas prices: The national average for unleaded is $4.37 a gallon and $5.55 for diesel. Most gas stations are sitting at $3.99 for unleaded in Wichita, while some are selling it at $4.09 a gallon.
Some economists are warning that we could be headed for a similar fate just like 2008 when the market crashed, which resulted in the 2009 recession as well as the mortgage crisis.
KSN spoke with Dr. Ted Bolema, who is an economist at Wichita State University, and while he did acknowledge the similarities between this year and 2008, he mentioned a different time that we should be worried about.
“I am old enough to remember the last time we had a serious inflation problem, and it took a serious, a really serious early 80s recession to bring us out of it,” said Bolema.
Bolema stressed that inflation is the big difference, and now it’s rising to the point where the cost of living is not keeping up, and some are struggling to try to find solutions to money problems.
“We’re starting to hear now about people who are trouble making ends meet and renting out parts of their houses, rooms so that becoming more popular as people who own houses and are having trouble making ends meet are looking for an extra revenue source and people who don’t have housing are looking for a place to go,” said Bolema.
There is some relief on the housing front as some feel the red hot market could be starting to cool, as one real estate agent told NewsNation.
“There’s a lot of concerns about the general state of the economy in both years,” said Bolema. “Right now inflation is running like eight or nine percent and wage increases are more like five or six percent.”
“Now we’re seeing like three or four really solid offers, maybe even one great offer but definitely not 10 or 20 or more,” said Allison Ziefert, a real estate agent from New Jersey.
The other big difference between 2008 and today is the jobs market. Bolema said job seekers have more options now than 14 years ago, and companies are starting to negotiate more flexible options.
“We come through these things, I think it’s going to take a while, but we’re talking about 2008, and we recovered from that problem,” said Bolema.