Money Management

Home prices may fall as much as 20%. 

The housing market is always in flux and this year is no different. Experts predict that home prices will take a dip this year due to a variety of economic factors. But will we see another 2009 housing crisis? Here’s why home prices are expected to fall in 2023.

Mortgage rates

In an attempt to slow down high inflation, the Fed raised rates seven times in 2022 with more rate hikes in 2023. This affects the cost of all kinds of loans, from auto loans to mortgages. As a result, mortgage rates have almost doubled from a year ago. To put this in perspective, for a $500,000 home your monthly payment would be $1,000 higher if you get a mortgage today compared to a year ago.

This means mortgages are becoming more expensive for potential home buyers, leading them to delay purchasing a home until they know they can afford it. Rising mortgage rates have also made it more difficult for sellers to find buyers who can qualify for loans at these higher interest rates.

Supply and demand

The average price of homes hit all-time highs last year due to the pandemic restrictions, low mortgage rates, and low inventory. Since hitting its peak, existing home sales have fallen for 11 consecutive months. The last time the pace of sales was this low was in 2010, during the housing crisis. Demand has fallen due to the high prices of homes and mortgage rates, making them unaffordable for many home buyers.

With the supply of single-family homes growing and demand decreasing, some experts believe that home prices may drop by 20% from their June peak of $414,000. As a result, a decrease in demand combined with an increase in supply of homes on the market has caused home values to decline across the country.

Fears of recession

While we are technically not in a recession, there are signs we will soon be heading into one. Last year, over 107,000 tech workers were laid off, with another 46,000 workers losing their jobs in the past several weeks. Dozens of crypto platforms and funds have declared bankruptcy and Wall Street has taken a beating the past 12 months, at one point entering bear market territory. The S&P 500 was down close to 20% in 2022 while the Nasdaq fell 34%. Corporate earnings show signs of economic slowdown, potentially leading to more layoffs in the coming months.

Will the market collapse?

Home prices are expected to decline but not to the extent we saw during the Great Recession. Banks and lenders have been more strict about qualifications for loans, and unlike 2008, there is much less inventory in homes. Unemployment overall is still low, so a surge of defaults is less likely too.

Plus, many homeowners locked in low interest rates, making their payments more affordable. So even though demand has slowed, low supply of homes and less likelihood of homeowners defaulting will help prevent the market from collapsing.

No matter what happens in the next few years, it’s important to remember that the real estate market fluctuates over time and can recover from even the most drastic dips in prices. The combination of fewer buyers and more homes available has caused prices to drop since hitting its high last year — and they are expected to continue dropping throughout 2023 as well. A price decline, however, will be good for first-time home buyers. With some research and smart planning, home buyers may be able to navigate this shifting landscape successfully!

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This may be the best way to lend money to friends and family. 

The COVID-19 pandemic has caused a lot of financial hardship, now coupled with high inflation and unaffordable housing costs. This has led to an uptick in the number of people turning to family and friends for help. To address this issue, Pigeon recently debuted a new personal loan app that allows you to lend money directly to your family and friends. It also sends payment reminders and tracks payments.

How does it work?

The Pigeon app is designed to make borrowing money from family and friends simpler and more transparent. Here’s how it works: First, you create an account, then you add the names of any family or friends who you want to be able to borrow from or lend money to. You can also set up multiple loans if needed.

Once you’ve added all the relevant information, you can start requesting or offering loans between yourself and the other parties involved. You can set up the terms of the loan agreement or import a loan you already have. The app will automatically calculate interest rates based on how much you are borrowing or lending, so everyone knows exactly how much they need to pay back or receive.

The app includes payment reminders so no one forgets when their payments are due. You can generate a legally binding contact and lend up to $500,000, all using the app. Pigeon has financial education for both the lender and borrower, and you can even earn rewards just by using the app that can be exchanged for Amazon gift cards.

How does Pigeon make money?

The app is free for both lenders and borrowers. There are no fees or penalties like a bank or credit card company would charge. While it is free to use, there are some charges to note. There is a 2.5% fee on any payments made internationally, and for faster processing, Pigeon recommends that you use its one-time payment feature. Pigeon takes a 3% fee from any debit or credit card transaction that goes directly to its payment processor, Stripe.

Is it safe?

Pigeon uses bank-level encryption technology to ensure all data transmitted through its servers is protected against cyber threats, like hacking attempts and identity theft. Pigeon uses Amazon Web Services for cloud storage and Stripe, the world’s largest online payment platform.

Should you use it?

In short, while the Pigeon app makes loaning money easy and secure to other people, as a platform, Pigeon does not itself lend money. It could take out the awkwardness of loaning money to friends and family. The app is free to use, offers rewards, and handles the paperwork and legalities. The loans can be customized in any way.

It’s important to remember that there are still risks associated with loaning money — even if those risks are minimized by using an app like Pigeon — and these risks should always be taken into consideration before entering into any loan agreement with family or friends. That being said, for those looking for a secure way to loan money directly between themselves and their loved ones, the Pigeon personal loan app may be worth checking out.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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Get cheesy on National Pizza Day with these money-saving deals. 

Let’s be honest — most of us don’t need an excuse to eat pizza. But since Feb. 9 is National Pizza Day, it’s the perfect opportunity to order a pie. You can slice into savings by taking advantage of money-saving deals. Whether you prefer plain cheese or believe that pineapple belongs on pizza (it does!), there’s a deal for you. Find out which pizza places have the most delicious discounts so you can cheese the day without ignoring your budget.

1. Papa Murphy’s

Papa Murphy’s runs its $6.99 mediYUM promotion daily, and you won’t need a coupon or promo code to save. You can get medium two-topping original crust pizzas for $6.99 each. You can satisfy your pizza cravings without depleting your checking account funds.

2. Pizza Hut

As a current promotion, Pizza Hut has its $10 Tastemaker deal. For $10, you can order a large pizza with hand tossed crust or Thin ‘N Crispy crust with three toppings of your choice. This offer is available for delivery and carryout. So, which three toppings will you choose?

3. Jet’s Pizza

Jet’s Pizza is known for its Detroit-style deep-dish pizza, but the chain also sells several other styles of pizza. On Feb. 9, you can get a 20% discount on all menu-priced pizzas when you use promo code “PIZZA23” and place an online order. This deal is available only on National Pizza Day. Both pick-up and delivery orders qualify for this promotion.

4. Sam’s Club

Are you looking for an easy and cheap way to celebrate the holiday? Sam’s Club members can score $1 off Member’s Mark 16″ pizzas. From Feb. 9 through Feb. 12., you can buy a pie for $7.98 instead of $8.98. Cheese, pepperoni, four meat, and deluxe pizzas are available.

5. Uno Pizzeria & Grill

On Feb. 9, you can enjoy buy one, get one 50% off pizzas when placing a takeout order at participating Uno Pizzeria & Grill locations. In addition to serving up deep-dish pizzas, the company has other crust options, including gluten-free and thin-crust pizzas.

6. Domino’s

Domino’s offers more than one way to score cheap pizza on National Pizza Day. By taking advantage of the pizza chain’s Mix and Match Deal, you can get two or more eligible items for $6.99 each. Medium two-topping pizzas qualify for this promotion. Domino’s also has a carry-out deal where you can get up to a large one-topping pizza with any crust for $7.99.

7. BJ’s Restaurant & Brewhouse

At BJ’s Restaurant & Brewhouse, you can score half-off any large deep dish or tavern-cut pizza Tuesdays through Sundays. This National Pizza Day, use promo code “HALFOFF” at checkout. This limited-time deal is available for takeout and delivery but only when ordering through the brand’s website or mobile app.

Get cheesy without going broke

In addition to the national pizza deals highlighted above, don’t forget to check if any pizza places based in your community are running money-saving promotions this Thursday. You could score extra savings while supporting your favorite local pizza shop. This National Pizza Day, it’s possible to have a slice day while honoring your personal finance goals.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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