Last year was a great year for the U.S. economy, and according to the latest economic predictions, 2016 is looking even better. As the dollar continues to gain ground against other currencies and the price of oil maintains at low levels, companies from many sectors are able to keep their costs affordable for their customers.
To help you get the most bang of your buck, let's review the eight buys that will be cheaper in 2016.
1. Gasoline and Diesel
If you thought that you had seen the lowest gas prices this year, wait until you see the prices next year. According to data compiled by Bloomberg Businessweek, the price of oil futures for December 2016 isn't that much higher from that of oil futures in December 2015. The cheap price of oil will cause a further drop in the prices of gasoline and diesel. For example, the average full price (including taxes) of regular grade gasoline was $2.12 per gallon in January 2015. The U.S. Energy Administration is currently forecasting that average price to be $2.06 in January 2016. Even during next year's summer months, the average full price of regular grade gasoline will be lower ($2.51 per gallon) than that of this year ($2.79 per gallon).
2. Heating Oil
More than 10% of U.S. households use heating oil or propane. Heating oil primarily serves households in the Northeast, accounting for close to 30% of homes in that region. Falling fuel prices will keep the U.S. average heating oil retail price low (including taxes). For comparison, the average price was $2.81 per gallon in January 2015, and it is forecasted to be $2.55 per gallon in January 2016. Owners of older homes that require heating oil will be happy to hear about these savings.
3. Foreign Vacations
In 2015, the U.S. dollar was and continues to appreciate against several currencies:
- The U.S. dollar is up 12% against the euro and may hit parity with the euro next year.
- The Canadian dollar has fallen nearly 20% against the U.S. dollar since January.
- The Brazilian real is down about 30% against the U.S. dollar since January.
- The Chilean peso is down close to 57% against the U.S. dollar over the last two years.
Take advantage of the strength of our dollar to visit foreign locations at lower prices and enjoy great exchange rates. Just make sure that you book your international flight well in advance. According to a study from Expedia, the lowest price fares for international tickets are found between 150 and 225 days prior to departure, with 171 days prior to departure providing the most savings.
Next year, prices of homes will rise only 3%, which is much lower than the 5% increase from this year and 11% from 2013. Given the increase during the last two years, analysts believe that home prices need to plateau in 2016 for buyers to have a chance of completing purchases. While the forecasted price for single-family homes in some areas will be higher in some markets, (such as 15% in Sacramento, CA and 14% in Fort Lauderdale, FL), there are plenty of markets that will see small price bumps (such as 1.1% in Houston, TX and 1.7% in Knoxville, TN). Research the market in your area, because this may be the year to get some new digs.
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5. Gibson Guitars
In September 2015, musical instruments marketplace Reverb broke the story that legendary guitar manufacturer Gibson USA will be lowering the prices of its line of 2016 models. Due to the many complaints of guitar fans about the prices of the 2015 lineup, Gibson reportedly will lower the prices of its 2016 models by 20% to 25% from current prices. From rock stars to recreational guitar players, many individuals will be happy to pick up a new Gibson.
The current trend of low milk prices is likely to continue until at least mid-2016, according to estimates from Farm Journal Media. Analysts expect milk production to slow down from the surplus levels of 2015 in order to increase prices a bit. However, this process will take several months to affect prices, if at all. It would take a massive consumption milk to put a serious dent on inventories and a lot of willpower from suppliers to resist dumping more milk into the market. So, the most likely outcome is more affordable milk prices for you throughout most of 2016.
7. Pork Products
The same low prices of bacon that you saw throughout this year are very likely to stick around next year. However, this time around it may not just be for bacon, but for all pork products in general. According to an agricultural economist at the University of Missouri, a slight uptick in hog production combined with a low price in corn (main feed when raising hogs) will keep the prices of pork products affordable throughout 2016.
Throughout 2015, the U.S. Department of Agriculture determined that there was more wheat in the world (721.55 million tonnes) than we could consume (719.56 million tonnes). In order to address this oversupply, prices of wheat had to be decreased, resulting in some small savings in the price of bread at grocery stores. In 2016, the USDA expects that production will reach a new record of 732.79 million tonnes. So, unless wheat farmers experience an absolute loss in crops due to some freak event, you can expect more savings in your weekly bread purchases next year.