Current Events in August 2023

Home prices are high and so are interest rates, but that hasn’t stopped Americans from buying their first home. 

Zillow's 2023 Consumer Housing Trends Report found that in 2023 half of all home buyers are purchasing their first home, the highest share that Zillow has ever recorded.  That’s an increase from 45% last year and a meaningful jump from 37% in 2021. 

Zillow says the share of first-time buyers probably hasn't been this high since 2010 when there was a first-time home buyer tax credit.

The percentage of first-time buyers has increased, in large part because people who already own homes aren’t selling and buying new homes. In many cases, existing homeowners have a mortgage rate well below 5% and aren’t willing to trade it in for an interest rate north of 7%.

Factors depressing sales

That’s where mortgage rates are right now, with some housing economists expecting the average 30-year fixed-rate mortgage to hit 8% in the coming weeks.

"High mortgage rates and a shortage of inventory keep would-be repeat buyers in their current homes," said Zillow’s senior population scientist Manny Garcia. "A greater relative share of first-time buyers is filling the gap, and they're competing against each other for the limited number of affordable starter homes on the market." 

Because of rising mortgage rates, first-time buyers are able to afford to pay less for a home, at a time when average home prices are rising once again. A new report from real estate brokerage Redfin estimates buyers have lost tens of thousands in purchasing power since 2022.

The report uses the example of a buyer with a total budget of $3,000 a month. With the mortgage rate at 7.4%, that buyer could afford to pay $429,000 for a home.

A loss of $71,000

However, a year ago the same buyer could have purchased a home costing $500,000 because the prevailing mortgage rate was around 5.5%. In other words, the buyer lost an estimated $71,000 in purchasing power because of the higher mortgage rate.

Today’s mortgage rates are the highest in about 20 years, but their impact is much more severe. In 2003, a 7% mortgage rate was not such a heavy burden because homes cost much less than they do today. A decade or more of rock-bottom mortgage rates allowed home prices to surge to record levels – levels some economists say are not sustainable with mortgage rates this high.

“The combination of high monthly mortgage payments and historically low housing inventory has pushed many would-be homebuyers out of the market,” the report’s authors wrote. 

“Home-purchase applications dropped to their lowest level in nearly 30 years during the week ending August 18, and Redfin’s Homebuyer Demand Index—a measure of requests for home tours and other buying services from Redfin agents—was down 7% year over year.”

Chrysler is recalling 44,708 model year 2022-2023 Jeep Wagoneers and Grand Wagoneers.

The upper B-pillar interior trim may not be seated fully and could interfere with the side curtain airbag (SABIC) deployment.

If deployment of the SABIC is compromised, occupant protection in a crash can be reduced, increasing the risk of injury

What to do

Dealers will inspect and reseat or replace the trim pieces -- as necessary -- free of charge.

Letters to owners notifying them of this issued are expected to be mailed September 22, 2023.

Owners may contact Chrysler customer service at (800) 853-1403. Chrysler's number for this recall is 76A.

Scanning a QR code to “find out more” may now lead to “get scammed some more.”

That’s right – those ever-present graphic codes that are being used for the list of beers a bar may serve to sign up for a discount from a retailer are cropping up in a good number of malicious emails.

And the only reason they’re there is that threat actors have figured out that they can utilize them to encode malicious URLs and get unsuspecting consumers to scan them and download some dangerous software onto their devices.

Cofense, an email security company, says the people most at risk are the ones who use their tablets or smartphones to read emails because those devices have built-in cameras that make opening a QR code easier than on a desktop or laptop. 

Users' personal mobile devices lack the protection of network and endpoint solutions that prevent access to malicious URLs and generate alerts for security teams to investigate, suggests Cofense’s Kian Buckley Maher.

“With most of the attacks occurring outside of the protection bubble created by a company, it is more difficult to gather evidence of the attack and track any subsequent actions taken by the user,” Maher said.

Where these codes are popping up

Security company Aura says that the number one QR code danger these days is one showing up on parking meters across the country. Recently, the Austin, Texas police department found 29 fraudulent QR codes on the city’s parking meters. 

“When unsuspecting victims scanned the QR code, they were sent to an official-looking payment page to pay for parking,” Aura’s Yaniv Masjedi said in his overview of the situation.

“But when they entered their credit card information, it was sent to scammers who could then use it to make fraudulent purchases or even sell the victims’ personal data on the Dark Web.”

Besides phishing emails and parking meters, Masjedi said that other QR scams can be found on or in:

• Tampered QR codes in restaurants

• Fake QR codes sent through the mail (surveys, sweepstakes, etc.)

• QR codes on unexpected package deliveries

• QR codes at sham COVID-19 testing centers

• QR codes sent over social media (hacked accounts)

• Cryptocurrency QR code scams

• Fake QR code scanner apps that download malware

Here's how those scams can play out:

Who you can – and can’t – trust

As you can see, since QR codes can be used for about anything, and scammers can impersonate just about anyone, all bets are off. It's been a long, slow build since QR codes first hit the scene, but scammers have graduated to the major leagues and going for the bigger fish. As an example, ConsumerAffairs found out about a major QR code scam ring related to cash apps like Venmo and Zelle.

Maher says the bottom line for everyone is to be wary of scanning QR codes from any source they do not trust. “If uncertain, it is advisable to make use of a web-based service to scan the QR code.”

There are lots of options as ConsumerAffairs found out when we searched for web-based readers, but make sure you research those because there could be a scammer lying in the weeds of those search results, too.

But as Maher demonstrated, scammers are even using trusted companies like Microsoft to become unwilling co-conspirators. Again, you can’t be too careful and contacting the company at its official website before scanning a QR code could save you a headache and, possibly, a lot of money.

Scammers have discovered that using information about sexual activity, whether real or not, is an effective way to extort money from victims. The trend began late last year and has only increased.

The latest ConsumerAffairs-Trend Micro Threat Alert found the scheme has become even more brazen.

Sextortion Phishing  

• Trend Micro's research team discovered scammer e posing as YouPorn, a free online adult video service, and requesting payments in Bitcoin from victims. These scammers claim that the victim has uploaded sexual content on their platform. 

• Trend Micro detected 67,366 logs on Aug 21. 

“This scam involves them contacting their victims and stating they have uploaded sexual content which the scammers have and will leak publicly or send to their family and friends if not paid an extortion fee in bitcoin,” said Jon Clay, vice president of Threat Intelligence at Trend Micro. “Trend Micro has recently seen over 67,000 of these scams in one day. Consumers who receive one of these messages should pause and consider this is most likely a scam and can reach out to the FBI at 1-800-CALL-FBI or report the crime online at tips.fbi.gov.” 

USPS Shipping Scam 

• Trend Micro's research team identified scammers impersonating USPS to inform users they parcel delivery failed due to incomplete address information and asked victims to fill out personal and credit card information on fake USPS websites. 

• Top five states being targeted are Florida, Texas, California, Washington and Illinois 

Australia Post Scam 

• Similar to what Trend Micro identified last week, scammers disguised as the Australia Post notifying victims that their parcel delivery was unsuccessful, then asking for their name, address, and credit card information to redeliver their package.  

• Top five states being targeted are Texas, California, Virginia, Ohio and Florida 

These two shipping scams are very similar. They both seek payment information as well as personal information that can be used for identity theft.

In reality, if the U.S. Postal Service doesn’t have enough information to deliver a package it will normally return it to the sender. And consider this – if it can find your phone number or email address, why can’t it find your physical address?

Back to School Shopping Scam 

• Between July 1-August 20, 2023, Trend Micro’s research team detected 179,646 back-to-school shopping-related scam URLs, which increased by 18% compared to the past 7 days.  

• Trend Micro detected a 64.12% year-over-year increase. 

• Top five states being targeted are Oregon, Virginia, California, Texas and New York 

Shopping scams generally leverage holidays, such as Mother’s Day, to trick consumers. These scams proliferated during the pandemic when there was a surge in online shopping.

One study found that an estimated 29% of people shopped online before the COVID-19 pandemic, but that percentage had grown to 37% by the end of 2020.

Travel Scam 

• Between April 1 to August 20, Trend Micro’s research team detected 2,789 travel-related scam URLs, which increased by 4.3% compared to the past weeks.  

• Trend Micro identified 2 fake Airbnb pages, with over one-third of the victims from Oregon (32.03%). 

• Top five states being targeted are Oregon, Virginia, Washington, Pennsylvania and Illinois 

In particular, scammers have targeted airline passengers this summer. For example, a random phishing email claims that you are getting a $500 travel credit from Delta Airlines that you can apply to a future trip.

You’re told to click on a link in the message, which is never a good idea. Victims either download malware or are taken to a site where they are told to enter personal information.

Crypto Scam 

• Trend Micro's research team identified scammers pretending to be ChainGPT, saying they were going to launch a time-limited and the biggest airdrop of the crypto community. Scammers asked victims to claim it with some log-in process, offering victims a chance be able to receive up to 1000 ChainGPT Blockchain Tokens.  

• Trend Micro detected 157 logs on Aug 19. 

The Federal Trade Commission offers some helpful information about Crypto scams here.  

Here’s a reminder that it’s always good to regularly check your credit card accounts. In addition to possible fraudulent changes, a legitimate merchant might place an accidental charge.

Wegman’s, the upscale supermarket chain, has disclosed that some customers were double-charged when they made purchases using a credit card. The extra charges occurred both at in-store checkout terminals and online.

The double-charging occurred on transactions that were processed on Aug. 16 and were reported at more than 110 Wegman’s locations in the U.S.

One consumer posting on Facebook said she contacted Wegman’s after she noticed the identical charges and was told that it was a “system-wide” error. Other customers advised shoppers to check their bank statements, though it’s not clear if the glitch affected debit cards.

Not to fear, company officials said affected customers will get reimbursed. The company said it is working with payment processors to restore the money. A company spokesperson told media outlets that affected customers should get their money back quickly, depending on the cards’ issuers.

The spokesperson did not disclose a reason for the error.

The last big travel day before the holidays – Labor Day ‘23 – is about to arrive.

And whether you’ve traveled earlier this summer and think you’ve got a handle on all that could be thrown at you – or this is your first trip in some time – you better be prepared because there’ll be a good number of potential stumbling blocks in your path.

You won’t be the only one traveling

Yes, it would be nice to have the sky and the road to yourself, but no such luck. More than 57% -- which is over 148 million American adults -- intend to travel for Labor Day or Labor Day weekend this year. That's 4.07% more than last year, according to TheVacationer.

Long TSA lines and the ripple of headaches they’ll bring

The U.S. Travel Association tells ConsumerAffairs that aging technology and a lack of TSA agents have caused the air travel system to become inefficient. That means long lines, agents who might be new to the job, and heaven forbid, more missed flights.

How long will it take to get through a TSA checkpoint? Planetware’s latest report says it depends on where you are departing. For example, both Chicago’s O’Hare and Midway, George Bush International in Houston, Washington, D.C.’s Dulles, San Francisco International, and Tampa International could be at a snail’s pace, somewhere between 15 and 20 minutes.

One quick note about Chicago Midway: Planetware says that Midway has reported more flight delays (22.6%) and cancellations (5.7%) than any other major airport in the U.S. since 2014.

Friday and Monday might not be much fun

Travel app Hopper’s lead economist Hayley Berg told ConsumerAffairs that the busiest days to travel will be Friday for departures – with 3.7 million travelers expected to depart from U.S airports – and Monday for return flights – with 3.6 million expected to depart from U.S airports.

If you want better odds, The Vacationer’s Eric Jones says that you should fly out the Tuesday or Wednesday before Labor Day and fly home the Wednesday, Thursday, or Saturday after.

The busiest airports? Here are Berg’s best estimates: 

Busiest airports and times:

1. Atlanta (ATL) - Estimated Seats Departing: 1,541,254 passengers; Busiest Times: Morning (8 am - 12 pm)

2. Denver (DEN) - Estimated Seats Departing: 1,024,839 passengers; Busiest Times: Morning (8 am - 12 pm)

3. Dallas Fort-Worth (DFW) - Estimated Seats Departing: 983,089 passengers; Busiest Times: Evening (4 pm - 8 pm)

4. Los Angeles (LAX) - Estimated Seats Departing: 927,031 passengers; Busiest Times: Morning (8 am - 12 pm)

5. Chicago (ORD) - Estimated Seats Departing: 816,943 passengers; Busiest Times: Evening (4 pm - 8 pm)

Maybe even cancel your reservation and fly another airline

Price4Limo shared some interesting information with ConsumerAffairs that it culled from travel data at the Bureau of Transportation Statistics – data that shows the best places to fly and the best airlines to take if having fewer hassles is one of your goals. 

The company’s analysts point to Hawaiian Airlines, Delta Air Lines, and Alaska Airlines as the best airlines to fly because those three have the lowest percentage of departure delays. On the other hand, the analysts' interpretation of the data shows that JetBlue Airways, Allegiant Air, and Frontier Airlines are the worst airlines to fly.

Does that mean you should cancel your flight if you’re on, say, JetBlue? Maybe.

"Canceling a flight can be stressful, especially when concerns about losing money are involved,” Maddie Weirman, part of the creative team at Price4Limo, told ConsumerAffairs.

“In alignment with our recent study, we’ve observed a significant uptick in online searches, with a 19% increase in inquiries about ‘canceling a flight and getting a refund’ over the past year.," Weirman said. "Additionally, searches for ‘compensation for flight delays’ have surged by a remarkable 79%."

Thinking about pulling the plug on your existing reservation? One word of caution: it's not a cakewalk. But if you do, Weirman offers these factors that could influence the difficulty of canceling a flight and obtaining a refund:

Complex policies: "Airlines have a variety of ticket types, each with its own cancellation policies and fees. Understanding these policies can be confusing, leading to difficulties in determining if you can cancel your reservation without losing money," Weirman said.

Non-refundable tickets: Many travelers purchase non-refundable tickets because they are cheaper -- and you may have done the same. Just remember -- those discounted tickets can come with strict cancellation rules and some awfully hefty charges if you do decide to change them.

Time sensitivity: To protect themselves, airlines usually have specific timeframes within which you can cancel and receive a full refund. Miss that window and you could be paying more than you want or more than it's worth changing the flight. 

Reason for cancellation: "The reason for your cancellation can also impact the difficulty of obtaining a refund," Weirman said. "Airlines are more likely to offer flexibility and refunds for cancellations due to factors beyond your control, such as illness or severe weather disruptions."

AT&T is trying to muscle its way ahead of Verizon and T-Mobile and bring consumers an answer to the pain point of the cost for monthly internet service.

The company plans to expand the use of 5G broadband cellular network for the home with Internet Air, a new fixed wireless home internet service that gives consumers a Wi-Fi delivered signal at the remarkably competitive price of $55 – $15 less than the average monthly internet access cost. 

The company is being choosy about where it makes Internet Air available, though. It says it’s “hyper-focused” on selecting geo-locations that have decent enough wireless coverage and capacity to deliver a great in-home experience and still maintain high-quality wireless service for its existing mobile users.

Those lucky locations include: Los Angeles; Philadelphia, Cincinnati; Harrisburg-Lancaster-Lebanon, Pa.; Pittsburgh; Las Vegas; Phoenix (Prescott); Chicago; Detroit; Flint-Saginaw-Bay City; Hartford-New Haven, Conn.; Minneapolis-St. Paul; Portland, Ore; Salt Lake City; Seattle-Tacoma;  and Tampa-St. Petersburg (Sarasota). 

Ease of set-up

The cherry on top is that consumers can self-install the system in five steps and be up and running in less than 15 minutes. 

When customers open the box, they will scan a QR code to access simple instructions. Most of the set-up is handled via the AT&T Smart Home Manager app, which identifies the strongest connection spot in your home so you can put the device there. The company claims its Wi-Fi extenders will enable you to create a mesh Wi-Fi network throughout your home, eliminating those dreaded dead zones.

Cost pluses

The $55 a month price point is the standard issue cost, but Internet Air is also eligible for the federal Affordable Connectivity Program (ACP) which provides eligible households with a benefit of up to $30 a month (up to $75 a month on qualifying Tribal lands) to reduce the cost of broadband service.

The company is kicking off its promotion of the product by giving new and existing AT&T Wireless customers Internet AirTM for $35 a month in select zip codes and with an eligible wireless plan.

Without question commercial airline safety has vastly improved in the last two decades. However, in recent weeks there have been a number of high-profile close calls, where aircraft in the air or on the runway have nearly collided.

The New York Times reports these near accidents occur a lot more than travelers think. For example, it reports a Southwest Airlines jet had to abort a landing at Louis Armstrong Airport in New Orleans last month because another airliner was on the runway, preparing to take off.

The Federal Aviation Administration (FAA) says there are multiple layers of safety protecting the traveling public, including Traffic Collision Avoidance Systems on commercial aircraft, surface safety technology at the country's biggest airports and “robust procedures.”

Still, the agency says one close call is one too many. The FAA said it will hold a series of runway safety meetings at approximately 90 airports between now and the end of September.

Runway safety meetings

“Sharing information is critical to improving safety,” said Tim Arel, chief operating officer of the FAA’s Air Traffic Organization. “These meetings, along with other efforts, will help us achieve our goal of zero close calls.”

During these meetings, officials from airports and airlines will identify unique risks to surface safety at that airport and develop plans to mitigate or eliminate the risks. Representatives from the FAA’s air traffic organization, airlines, pilots, airport vehicle drivers and others will participate, the agency said. 

The FAA points out that air travel has never been safer. It says U.S. airlines have transported billions of passengers since 2009 without a fatality.

The Times investigation warns that the streak could end at any time. Its investigators found near misses involving U.S. commercial airlines happen on average multiple times a week.

Not enough air traffic controllers?

“The incidents often occur at or near airports and are the result of human error, the agency’s internal records show,” the investigators wrote. “Mistakes by air traffic controllers – stretched thin by a nationwide staffing shortage – have been one major factor.”

Joe Schlosser, an aviation expert and vice president at ISN, agrees that the demands placed on controllers could be a factor.

"Air traffic control facilities are facing massive labor shortages right now," Schlosser told ConsumerAffairs. "As air traffic controllers work mandatory overtime, many are so fatigued that it is potentially impeding their ability to perform their jobs properly. The return of air traffic from pre-pandemic levels is only exacerbating the issue, as more commercial aircraft are in flight and on the runways."

In response to the Times investigation, the FAA has released data showing that the number and rate of “runway incursions” are steadily declining since the pandemic. The data show there were 1,697 in 2022 and 985 so far this year.

View From The Wing’s analysis of FAA data paints a more troubling image. It reports there were 46 near-collisions in July and 300 over the last 12 months.

July turned out to be a fairly unpleasant month for people selling a home and for buyers. Sales continued to fall but home prices ticked higher.

The National Association of Realtors (NAR) reports sales of existing homes declined 2.2% from June. Compared to July 2022, sales fell off a cliff and were down 16.6%.

On a monthly basis, sales were slightly higher in the West but were down in the Northeast, Midwest and South. All four regions registered year-over-year sales declines.

“Two factors are driving current sales activity – inventory availability and mortgage rates,” said NAR Chief Economist Lawrence Yun. “Unfortunately, both have been unfavorable to buyers.”

Buyers with good credit still had to pay close to 7% for a mortgage. Rates have moved beyond 7% in August.

Finding a home to purchase was just as much of a problem. Total inventory was up slightly from June but was down nearly 15% from 12 months earlier.

Inventory levels are keeping prices high

Housing economists say it’s that low inventory number that is keeping home prices elevated. The median existing-home price for all housing types in July was $406,700, an increase of 1.9% from July 2022. Prices rose in the Northeast, Midwest and South but were unchanged in the West.

Single-family home sales slid to a seasonally adjusted annual rate of 3.65 million in July, down 1.9% from 3.72 million in June and 16.3% from the previous year. The median existing single-family home price was $412,300 in July, up 1.6% from July 2022.

“Most homeowners continue to enjoy large wealth gains from recent years with little concern about home price declines,” Yun said. “However, many renters are concerned as they’re facing growing affordability challenges because of high interest rates.”

The exceptions to fast-rising rents can be found in Florida. The CoStar Group reports that a recent wave of apartment construction has shifted the supply and demand balance to renters, causing rents to stabilize, and in some cases fall in Tampa.

For those secretly hoping for a housing market crash to lower prices, that doesn’t appear to be in the cards – at least not in the immediate future. Distressed sales – foreclosures and short sales – represented only 1% of sales in July, virtually unchanged from June and the previous year.

There’s good news about new car prices. Cox Automotive reports they barely rose over the last 12 months.

But there’s also some bad news. The price of a new car or truck sits at an all-time high, with an average transaction price (ATP) in July of $48,334. With still rising auto financing rates, that stretches affordability for the average consumer.

“New-vehicle price inflation has all but disappeared in 2023,” said Rebecca Rydzewski, research manager at Cox Automotive. “New-vehicle prices, primarily driven by cuts in luxury and electric vehicles, are decreasing as inventory is steadily improving. With higher inventories and higher incentives helping to keep downward pressure on prices, there certainly are good reasons for shoppers to be heading back into the market.”

Maybe, except for that ATP of more than $48,000. With inflation in other areas raising the cost of living, a prudent consumer might think twice before taking on more expensive debt. But for consumers willing and able to buy a new vehicle, dealers are working harder than they have in years to make it worth their while.

More incentives

Cox reports manufacturers increased their incentive spending in July for a tenth straight month, averaging $2,148 or 4.4% of the ATP. That’s about double what it was a year ago.

Still, challenges remain for new car buyers. Even non-luxury models averaged $44,700 in July. 

The bigger story is that unlike five years ago, only one model transacted below $20,000 in July. 

The Mitsubishi Mirage’s ATP in July was $19,205, becoming one of the only affordable new vehicles for buyers on a tight budget. In July 2018, there were a dozen vehicles with ATPs below the $20,000 barrier. 

Today, models like the Hyundai Venue, Kia Rio, Nissan Versa and Toyota Corolla, are all selling for well over $20,000. At the other end of the scale there were 32 vehicles in the Kelley Blue Book database selling for an average price of over $100,000 in July.

Today, a vehicle doesn’t have to be a “luxury car” to be considered a luxury for many consumers.