Buying a home? A recession might just help you

Plus, your very own Schitt's Creek

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  August 20, 2022 | Issue #56

Good morning! This week we're talking recessions, HELOCs and Schitt's Creek. This issue of Money Moves was written by Aly J. Yale. The upside of a downturn Getty Images It's easy to hear "recession" and think doom and gloom. But for hopeful homebuyers? There actually might be some silver lining to an economic slump. It's true: If the economy heads into a recession — something that some experts say has already happened — there could be a few advantages for those hoping to buy a home. These might include:  Less competition. Lower mortgage rates. Slower price growth. More leverage over sellers. And those are just a few of the upsides buyers might see if things go south. As Money writer Leslie Cook recently wrote, "Not all recessions lead to a collapse in the housing market. In fact, most experts agree that today's market is unlikely to end in a Great Recession-style crash. A recession might even open up more opportunities for buyers who are well prepared and have the financial resources." For more: Why a Recession Could Help Homebuyers — Plus 5 Tips for Buying During a Downturn What cooling off? 10 Cities Where Home Prices Are Rising the Most Bidding war, shmidding war Higher mortgage rates have pushed many homebuyers out of the market. But for those who stick it out, they face much less competition than they did just a few months ago. According to real estate brokerage Redfin, bidding wars have plummeted in recent months. In January, almost 70% of all buyers faced competition when bidding on a home. Now, that share's fallen to just 44.3% — the lowest point since April 2020 (when much of the country was shut down due to COVID-19). Even better? Buyers who do find themselves in bidding wars face fewer competing offers. A year ago, the average bidding war had 5.3 offers. Today, it's only 3.5. Here's a look at the cities where bidding wars are least common: And where bidding war rates are the highest: A mass exodus: Homebuyers Are Fleeing These 10 Cities — Here's Where They Want to Move Now Learning from the past: Bubble or No Bubble? What History Tells Us About the Likelihood of a Housing Crash This Year Say hello to HELOCs Money; Getty Images A year ago, cash-out refinances were the slam-dunk way to access your home equity. You'd apply for a new mortgage, trade in your old interest rate for a sub-3% one, and get cash back in the process. What could be better? Now, with rates above 5%, refinancing is a hard pass for most homeowners. Instead? It's all about the HELOC. The use of HELOCs — or home equity lines of credit — has surged since rates began to rise. According to credit bureau TransUnion, HELOC originations are now up 41% compared to a year ago and at their highest point since 2019. Some homeowners are using them to pay for renovations or home repairs. Others, like Connecticut homeowner Trave Harmon, are treating them more like a financial safety net. "The economy is changing, and insurance companies do not pay you for having low income or no job," Harmon recently said. "So I took out a HELOC now just in case something happens." For more: Homeowners Are Increasingly Turning to HELOCs for Extra Cash Down payment strategies: 5 Creative Ways to Afford a Down Payment as Home Prices Soar Your very own Schitt's Creek Want a home and new business all in one? Then snap up the Smokey Bear Motel, now for sale for just $860,000. Located in Capitan, New Mexico — population 1,356 — the motel and RV park gives off major Schitt's Creek vibes (only a little more up to date). The property is recently renovated, every room features a flat-screen TV, and there's even a spacious three-bed, two-bath manager's quarters out back. The best part? That may be the Smokey Bear Restaurant next door. It's no Cafe Tropical, but its "smothered breakfast bear burrito" does look pretty good. (I wonder if they fold in the cheese?) Happy hunting, P.S. Spot a weird or unique home listing? Share it with me on Twitter, where I'm @alyjwriter, or via email at alyjyale@gmail.com. P.P.S. Have a friend who loves real estate or is looking for a home of their own? Please forward them this email or send them to the Money Moves subscription page. Money's Essential Home Buying Resources: Summer 2022 On the hunt? Check out Money's Mortgage Calculator, list of The Best Mortgage Lenders and look at the latest mortgage rates. Thinking of refinancing? Our list of The Best Mortgage Refinance Companies can help. You can also use our Mortgage Refinance Calculator or these refi tips. Key question: How much house can I afford?

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