| Good morning! This week we’re talking buyer holdups, senior mortgage denials and scary smart tech. This issue of Money Moves was written by Aly J. Yale. | | | | Why buyers are backing off | | | | Money; Getty Images | I’ve been talking for weeks now about the easing conditions for homebuyers. Home prices have slowed down (or even dipped) in many places, properties are staying on the market longer, and mortgage rates have even come down from that sky-high 7.08% rate we saw in November. In fact, a whopping 3 million more people can afford a home now that rates are lower. So why aren’t more people buying homes? As Money writer Leslie Cook recently put it, “The housing market is coming out of its slumber, at least a little. But plenty of would-be buyers who can afford a home are still opting to hit the snooze button on buying — or skipping the idea for good.” Experts say there are many factors driving this downward trend in demand: - Mortgage rates are lower — but not really “low,” especially compared to the sub-3% rates we saw in 2021.
- Some buyers think home prices have further to fall.
- The economy is uncertain.
- Some employers are ending work-from-home arrangements.
- Rents are getting cheaper.
Also, despite recent upticks in inventory, there still aren’t many listings to choose from. This is partially due to the housing deficit we’ve dealt with for years, but hesitant homeowners are an issue, too. Many homeowners — about 85%, actually — have rates below 5% (so trading up to today’s 6.50% rate is probably not ideal). This could all change when we get into the traditionally red-hot spring season — but only time will tell. | | | | | | | | | | | | Higher age, high chance of mortgage denial | | | | Getty Images | As if most of us weren’t already dreading getting old, a new study has made aging seem even more of a drag — at least if you’re hoping to refinance or buy a home. According to a report from Boston College’s Center for Retirement Research, older Americans have a harder time qualifying for a mortgage. It starts at age 50, when borrowers are 1.07% more likely to be denied a mortgage compared to younger borrowers. By 60, it’s 1.54%, and at 70, it’s a 2.7% higher chance. Moreover, men are more likely to be rejected than women. These conclusions held true across a variety of lenders and loan types (including cash-out refinances), according to the study. The researchers didn't find a definitive reason for this trend, but they do point to higher mortality risk as a factor. “The bottom line is that whether the analysis focuses on age group or individual ages, the probability of rejection of an application increases with age,” the report reads. “This result is surprising because credit score and wealth are positively correlated with age.” | | | | Out West, things are looking up for homebuyers | | | | Money; Getty Images | So far, experts have been iffy on whether home prices will drop this year. Some, like Redfin economist Taylor Marr, predict home prices will decline by around 4% by the end of 2023. Others, like the National Association or Realtor’s Lawrence Yun, predict more of a leveling off — or even a slight incline. A new study, though, projects prices could fall almost 20% in some parts of the country. According to newly-released predictions from the University of California San Diego, Phoenix will see the biggest home price declines this year, with an 18% decline by 2023’s end. Here’s a look at where the UCSD study predicts the biggest price declines this year: | | | | | And the top spots for home price gains: | | | | | | | | | | | | | | | | The threat of home tech | | | | Getty Images | Smart home tech certainly adds convenience — I’ll be the first to admit that. On an almost daily basis, I use my Echo to check the weather, listen to music, set alarms, turn on and off lights, and, most often, communicate with my kids in different parts of the house. I even got smart plugs to turn my Christmas tree lights on and off this year. But smart tech isn’t without fault. In fact, according to a New York Times article, there are some pretty scary downsides. Take Clint Basinger, a new homeowner interviewed by Times’ Anna Kode. Clint saved for 15 years to buy his new Asheville, North Carolina, house, only to find himself locked inside — against his will — the first night on the property. “‘Good night,’ the voice said. ‘It’s bedtime.’ Then, he heard the sound of locks clicking. ‘I couldn’t do anything with the doors, all the windows were armed, all the motion sensors turned on. I had no clue what to do.’” In Basinger’s case, it was simply an error on the previous homeowner’s part, but according to Kode, these devices are sometimes used with malicious intent, like for unwanted surveillance — or worse. It’s a scary thought that almost makes me miss the days of tethered phones and dial-up internet. (I said *almost.*) | | | | 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: Winter 2023 | | | | | | This newsletter is free because Money earns a commission when you click or make purchases from the links in this email and on our site. We also receive compensation for some of the products and services featured in this message. Offers may be subject to change without notice. about how we make money.
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