Three Big Items To Buy Now

BOSTON ( TheStreet) -- March can take all of its spring optimism and stuff it. For anyone thinking about spending money this month, there are gray skies ahead.

Consumers shifting from light-jacket weather one day to parkas and thermal pants the next are already going through enough upheaval without commodities prices, interest rates and general economic uncertainty raining on their pleasant skip to the store. Since January, the cost of that trip has risen 42 cents per gallon to $3.52, a full 77 cents more than the same end-of-season outing last year.

Meanwhile, the World Bank's Food Price Index shot up 15% within the past year as wheat prices more than doubled and sugar, corn and cooking oil costs all increased, increasing U.S. food prices by 1.5%, according to the Consumer Price Index. It also became costlier to own a home within the past year, as the National Association of Realtors saw a nearly $4,000 surge in average existing home prices last year.

Though all of these costs are on the upswing, shoppers are still increasingly eager to end their hibernation; the Consumer Confidence Index rose 5.6 points after an increase in January. Maybe they already know they're ahead of the curve and getting a good deal while they can.

TheStreet took a look at the March marketplace and found six areas where consumers should spend before March spring subsides and cold economic reality sets in:

Travel
If you're looking for evidence airline fares are only going up this year, here's some: yesterday's announcement by American Airlines ( AMR) that it has raised the cost of a round-trip ticket by $10. Considering that the prices of network carriers United ( UAL), Continental, Delta ( DAL) and US Airways ( LCC) always ascend to whatever altitude their competitors reach, American will have no trouble finding a wing man to back up its bigger fares.

"With all the fears of oil increasing, fares are just going up," says Anne Banas, editor of SmarterTravel.com. "This will be the seventh fare hike this year, which means fares have risen roughly every 10 days."

If the airline price increases were simply a matter of supply and demand and diminished capacity, Banas says consumers would simply have to hold off until less popular pages appeared on the calendar. Since base fare increases are being supplemented with fuel surcharges and more fees -- including American's fee for phone orders that recently jumped to $30 from $25 and JetBlue's ( JBLU) second-bag fee that took off to $35 from $30 -- booking early is a frugal flier's best bet.

"It's not a bad strategy," Banas says. "I'm predicting we're going to see more price hikes in spring and given that summer travel comes at such a peak time, there's a good logic to booking early and locking in the lower price."

If travelers are thinking about extending that strategy to tours or cruises, however, that's just not going to fly. SmarterTravel columnist Ed Perkins notes that unlike a plane ticket, a cruise or tour agreement is a contract with a lot of fine print -- which usually includes stipulations about fuel surcharges and price hikes of as much as 15%.

Housing
If you were looking for a steal during the first two months of the year, housing wasn't it. A $4,000 jump in the average price of existing homes last year was greeted with a corresponding uptick in rates that Freddie Mac says were at 4.77% for a 30-year fixed mortgage in January and rose to 5.05% by the end of February.

Then March blew in like a lion and all the scary housing market forces retreated like lambs.

Rates fell to 4.88% last week, while existing home prices plummeted by an average of $10,000, to $158,800, well below 2009's new homebuyer-fueled $172,500 and 3.2% lower than during the same period last year. Since each has shown signs of creeping back up, March may be the best opportunity to buy for folks with the means and will to do so.

"The decision if and when to buy a home is a very personal one and depends on many factors, however," says Stephanie Singer, spokeswoman for the National Association of Realtors. "For buyers who qualify and are ready to assume the responsibilities that come with owning a home, conditions are favorable."

Cars
March is generally a good month to buy a car anyway, but with gas prices rising and Edmunds.com noting that average buyer incentives last month were flat from January and down $99 from last February, it's about to get a lot more interesting.

Pent-up demand, increased dealer discounts, model launches and the consumer's desire to be on a lot when the cars aren't all coated in a foot of snow usually make March one of the biggest months on an automaker's sales calendar. After a 23% year-to-date increase in car sales fueled by a 27% jump to nearly 1 million car sales in February -- the industry's highest monthly sales since August 2009 -- automakers aren't going to let a little thing like a 77-cent spike in gas prices downshift their numbers.

"That's probably not going to have a big impact on the total number of cars sold, but on the mix of what gets sold," says Jesse Toprak, analyst for TrueCar. "When gas prices rise, we see a shift toward more fuel-efficient vehicles, and already this month we've seen a shift toward vehicles getting 30 miles per gallon and higher consideration for hybrids."

While it may be a good idea to get a more fuel-efficient vehicle when gas prices spike, it's better to buy one that's actually going to save you money in the long run. Edmunds notes, for example, that the $50,000 BMW X5 Diesel and its almost 23 mile-per-gallon average is better than that of similarly-priced conventional competitors, but still makes owners wait more than 25 years before they see substantial savings. The Volkswagen TDI and Nissan ( NSANY) Altima Hybrid take 14 and 10 years, respectively, to produce fuel savings over their gasoline equivalents.

"There are several good reasons to purchase a hybrid or diesel car, but in many cases, saving money isn't one of them," says Ronald Montoya, consumer advice associate at Edmunds.com. "Now that federal tax credits have expired, car buyers may be surprised to learn how long it takes for savings at the pump to offset the additional expense of buying a hybrid or diesel car."

There are fuel-efficient deals out there. The Mercedes Benz GL-Class diesel is $1,000 less than the gasoline version and gets better mileage. The Toyota ( TM) Prius, the Lexus LS250h and the Lincoln MKZ Hybrid, meanwhile, all overcome their starting price and create substantial savings within their first year off the lot. With fuel prices just starting to rise and unrest in countries such as Libya and Bahrain continuing, Toprak says buying before demand hits may yield the best deals of all.

"Continued unrest in the political and international arena has an effect on stability and on U.S. consumer perception, especially when they happen in countries with high oil production," Toprak says. "However, we're not really seeing a decline in total volume."

-- Written by Jason Notte in Boston.

>To contact the writer of this article, click here: Jason Notte.

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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.

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