Why gas prices are on their way down

Summary

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Episode Overview

Title: Why gas prices are on their way down
Podcast: Marketplace Morning Report
Host: David Brancaccio
Date: February 17, 2026

This episode of Marketplace Morning Report breaks down the economic factors behind the current drop in gasoline prices, explores how that affects consumers, provides a broad snapshot of inflation trends, and introduces a novel approach to tackling America’s affordable housing crisis by spotlighting innovative modular construction.

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Key Discussion Points & Insights

1. Gasoline Prices Are Declining

• Inflation Moderates: Inflation is slowing, with the Consumer Price Index up 2.4% year-over-year compared to 2.7% previously, though most items remain more expensive.
• Gasoline as an Exception: Gasoline prices have dropped 7.5% over the past year, equating to about 20 cents savings per gallon.
  • [01:32] David Brancaccio: “An exception is gasoline down 7 1/2% in a year. Not by a lot. 20 cents a gallon on average, but enough to buy yourself a king size bag of Peanut M and Ms. On a typical fill up.”
• Current National Average: Regular gas now below $3/gallon in many places.
• Reasons for the Drop:
  • Increased Supply: OPEC is boosting production.
  • Release of Venezuelan Crude: U.S. plans to flood world markets with more oil.
  • EV Adoption: Electric vehicle growth is curbing demand for gasoline.
  • [02:25] Prof. Gernot Wagner (Columbia Business School): “Supply up, demand down, prices go down.”

2. Consumer Impact & Perception

• Mental Relief for Drivers: Many Americans feel financial relief at the pump.
  • [02:48] Stephen Cates (Bankrate): “Talking to my father, he said, wow, gas prices are so low now. This is great.”
• Mixed Sentiment Overall: Despite cheaper gas, costs for housing, groceries, and utilities still rise, tempering consumer confidence.
  • [03:05] Johnny Sawyer (Ipsos): “Even though gas prices are down year over year, their prices are up.”
  • Housing, groceries, electricity (+6%), and natural gas (+10%) are notably more expensive than a year ago.

3. Broader Economic Trends

• Other Price Movements: Some goods are outliers—TVs, for instance, are massively cheaper than in 1950 (down 99.4% after inflation).
  • [03:27] David Brancaccio: “That's not the trend for college tuition, healthcare services or housing or childcare.”
• Economic Forecast:
  • The economy appears stable, with about 2% growth and no recession in sight. Inflation is expected to fall to 2%, and unemployment to hover near 4% by year-end.
  • [03:59] David Kelly (JP Morgan Funds): “It's not brilliant, but it's certainly not bad. I think a fairly stable, moderate economy is where we are.”
• Risks Ahead: Potential shocks from artificial intelligence spending and geopolitical risks are flagged as unpredictable factors that could disrupt this stability.
  • [04:31] David Kelly: “Beware of the shock around the corner because it’s probably something you never even considered.”

4. Innovation in Affordable Housing

• Tackling the Crisis: The episode spotlights Reframe Systems, a company rethinking the way homes are built to address the shortage and high cost of housing.
  • Huge Regulatory Hurdles: Over 30,000 unique zoning jurisdictions in the U.S. make standardization difficult.
  • Flexible Factory Production: Reframe develops local factories that customize homes for specific codes—using local labor for both factory and onsite work.
    • [06:13] Felipe Polito (Reframe): “Every single project has to be built custom to meet the demands for that site. You cannot build a single product repeatedly in a factory because you need to get this variation outcome.”
  • Assembly-Line Approach: By breaking construction into clear, software-driven steps, workers with limited previous experience can participate in the process, similar to assembling IKEA furniture.
    • [07:15] Felipe Polito: “All you need to know is that 18 goes to 18, 16 goes to 16, 14 goes to 14. And very much like an IKEA kit, you're just assembling it the way it’s supposed to be.”
  • Broader Labor Pool: Opens construction work to a wider range of employees, improving access and efficiency.

5. Notable Quotes and Memorable Moments

• On Falling Gas Prices:
  • [02:25] Prof. Gernot Wagner: “Supply up, demand down, prices go down.”
• On Public Perception:
  • [02:48] Stephen Cates: “My father… said, wow, gas prices are so low now. This is great.”
  • [03:05] Johnny Sawyer: “Even though gas prices are down year over year, their prices are up.”
• On Economic Stability:
  • [03:59] David Kelly: “I think a fairly stable, moderate economy is where we are.”
  • [04:31] David Kelly: “Beware of the shock around the corner…”
• On Housing Innovation:
  • [06:13] Felipe Polito: “You cannot build a single product repeatedly in a factory because you need to get this variation outcome.”
  • [07:15] Felipe Polito: “Very much like an IKEA kit, you're just assembling it the way it's supposed to be.”

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Timestamps for Important Segments

• [01:32–02:29] — Gasoline price trends and economic context
• [02:48–03:09] — Psychological impact on consumers, broader economic pressures
• [03:27–04:31] — Historical perspective on prices, economic outlook, and risks
• [05:41–08:07] — Innovations in affordable housing, Reframe Systems’ modular approach

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Episode Takeaway

Gas prices are bucking the usual inflation trend and falling, thanks in large part to global supply shifts and reduced demand—offering welcome, if limited, relief for drivers. Yet, overall household costs continue to rise, tempering any broad optimism. Meanwhile, innovative solutions in modular housing could streamline building and expand labor possibilities, offering a glimmer of hope in the ongoing housing crisis. The economy, for now, is steady—but as always, unforeseen shocks loom on the horizon.

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For more: The full special on housing innovation can be found atop the “This Old House” podcast feed.
Host: David Brancaccio
Reporters: Mitchell Hartman
Guests: Gernot Wagner (Columbia Business School), Stephen Cates (Bankrate), Johnny Sawyer (Ipsos), David Kelly (JP Morgan Funds), Felipe Polito (Reframe Systems)

Transcript

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[Marketplace Reporter / David Brancaccio]

Inflation doesn't make things cheaper, but a few things are cheaper. Inflation is moderating. Last week we saw the Consumer Price index going up 2.4% in a year versus 2.7% as calculated a month earlier. So prices are still going up, and we often figure nothing ever actually goes down in price. And an exception is gasoline down 7 1/2% in a year. Not by a lot. 20 cents a gallon on average, but enough to buy yourself a king size bag of Peanut M and Ms. On a typical fill up. Marketplace's Mitchell Hartman has more Prices are.

[Marketplace Host]

Still rising on most consumer goods, more than the Fed wants. By contrast, says nationwide economist Kathy gasoline.

[Marketplace Reporter / David Brancaccio]

Prices have been deflating. Regular now is below $3 a gallon.

[Marketplace Host]

The reason is basic economics, says Gernot Wagner at Columbia Business School.

[Guest Expert / Interviewee]

Supply up, demand down, prices go down.

[Marketplace Host]

OPEC is boosting oil production while the US plans to flood the world market with Venezuelan crude. Meanwhile, as electric vehicle adoption spreads globally, it throttles gasoline demand. All of which translates to lower gas prices for US Consumers. Here's Stephen Cates at Bankrate.

[Guest Expert / Interviewee]

I think the impact is very much mental for most people. Talking to my father, he said, wow, gas prices are so low now. This is great.

[Marketplace Host]

But that positive sentiment might not boost overall consumer confidence or spending much, says Johnny Sawyer at polling firm Ipsos.

[Guest Expert / Interviewee]

Even though gas prices are down year over year, their prices are up.

[Marketplace Host]

You know, housing, groceries, Also electricity up 6% and natural gas up nearly 10% since last year. So while it's cheaper to drive to and from work these days, it's more expensive to heat and light your house once you get there. I'm Mitchell Hartman for Marketplace.

[Marketplace Reporter / David Brancaccio]

I saw one calculation that televisions are 99.4% lower in 2026 compared to the inflation adjusted price in 1950. That's not the trend for college tuition, healthcare services or housing or childcare. Better stop there now. The goal can be to stick a soft landing, calm prices down without falling into a pit. David Kelly is chief global strategist at JP Morgan Funds. He says that he's gone through all the data and concludes things are nicely balanced out for now.

[Economist / Analyst]

That's right. You end up in an economy that's pretty stable, about 2% growth, no recession really on the horizon. I think the inflation rate will eventually later this year come down to 2%. I think the unemployment rate, if anything, will end up up lower than it is now. So maybe at 4% by the end of the year. It's not brilliant, but it's certainly not bad. I think a fairly stable, moderate economy is where we are.

[Marketplace Reporter / David Brancaccio]

What was Winston Churchill's warning about governing? Something about events, dear boy. Events. We don't know what's going to happen tomorrow, but barring something bad. Right.

[Economist / Analyst]

I think the history of the 21st century is Beware of the shock around the corner because it's probably something you never even considered. I think we're seeing so much frenzy in AI spending and AI infrastructure that there's some risk from that and then there's geopolitical risk. So there's plenty of things that could go wrong. But really what I worry about for investors is not so much the economy is going to do something terrible to them, it's just that something does go wrong. They could get pretty badly hurt.

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[Marketplace Reporter / David Brancaccio]

Edu. We have a new approach now to the affordable housing crisis. It is a way to build more homes quicker given the thousands of different sets of rules governing how you build, rules which vary by county and town. This is one of the companies we discovered reporting a one hour special called Building Tomorrow from Marketplace and this old house radio hour at Reframe Systems in Andover, Massachusetts. They can dial in local building codes when making houses in factories. Reframe's co founder is Felipe Polito.

[Guest Expert / Interviewee]

In the United States, There are over 30,000 zoning jurisdictions. Every single project has to be built custom to meet the demands for that site. You cannot build a single product repeatedly in a factory because you need to get this variation outcome.

[Marketplace Reporter / David Brancaccio]

Reframe is trying to scale housing by spreading a network of small factories across the country. Keeping labor local while standardizing everything else.

[Guest Expert / Interviewee]

What that lets us do is have the local labor work on the houses in our communities. So our electrician or plumber who are working in the factory are the same ones that are wrapping up the work on site. Which means that we as Reframe are going all the way to the finish and delivering that home from end to end. So you imagine a world where you can type in an address and get a house that is compliant to that local with the ready price and time frame for it to be built.

[Marketplace Reporter / David Brancaccio]

The philosophy goes beyond automation. It's about structuring work by turning construction into a clear step by step process. Almost paint by numbers.

[Guest Expert / Interviewee]

Behind you over here is a smart saw. This machine feeds lumber and cuts it automatically while printing onto the material. And what we get here then is that this is a kit that then will be assembled into a wall. But as somebody assembling it, all you need to know is that 18 goes to 18, 16 goes to 16, 14 goes to 14. And very much like an IKEA kit, you're just assembling it the way it's supposed to be.

[Marketplace Reporter / David Brancaccio]

By shifting the work into a controlled factory and guiding each step with software, Reframe streamlines requirements so more people can do precision work without sacrificing quality.

[Guest Expert / Interviewee]

What is interesting is that today actually we have much wider pool of operators than you would get on the field. We can have folks that otherwise would not be doing construction actually doing these tasks.

[Marketplace Reporter / David Brancaccio]

Felipe Polito of Reframed Systems. We have lots of new ways to build houses in faster, more resilient and energy efficient ways in our special called Building the Future of American Housing, which I co host with Jen Largess from this Old House Radio Hour. It's at the top of this Old House feed wherever you get your podcasts. In Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report. From APM American Public Media.

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