I'd say Babadook is one of my fav recent psych horrors.
I love psycological horror because it takes away the easier devices, jump scares and gore, and forces us to ask more about what really gets to us.
The best thing to do is reach for parts of yourself, or big questions, that really keep you awake. What if people don't actually care about me and are pretending? What if I'm only a good person because I want to look good? Who around me would turn on my if it benefited them? What do I mean in a universe so large? Will I die the same way as my grandfather? How can I protect my child from all the random accidents that can take a person away in a second? Why are orangutan arms Like That?
A lot of what hits people plays on cultural anxieties. Invasion of the Bodysnatchers was scary partially because of the fear of the communist lurking next door. Lovecraft wrote horror partially based on the terror and alienation that stemmed from his racism. As times change, horror works have started to focus less on fear of the outsider, and more fear of those who treat you as an outsider. Shape of the Water is half about this. Babadook shows the frustration and loneliness of being a single mother. Get Out shows the terror of feeling like your body is a commodity for people who see you as less human, and that even those you love won't have your back.
I think, at the end of the day, a lot of psychological horror is fear of how humans treat each other, how we might be treated as well as how we might treat others. This is a great review on how Black Mirror is less about technology, and more about how technology gives us new ways to hurt each other. The Purge isn't about lack of laws, it's about the fear that those laws are the only thing holding people back. So is Lord of the Flies. Even zombie films aren't usually about the shambling dead, it's the eight survivors in the mall deciding what to do. My personal favourite horror series is the TV show "In the Flesh", featuring 'treated' zombies returning to society, and a young man who killed himself returning to his small town as even more of an outsider.
Also, from your local disabled person, I'd really love to see less horror based on Spooky Disfigured people, how crazy people are terrifying and dangerous, creepy wheelchairs, and un-researched mental breakdowns.
-Please do not use physical problems (burn scars, canes, ect) as a metaphor for internal disfigurement. People carry this into real life and it's nasty.
-People with mental illnesses are far more likely to be victims of violent crime than perpetrators, partially because so many people find them strange and frightening. Showing the horror of being in danger from a world that sees the way you move and speak as inherently terrifying is far more interesting than telling people that assumption is right.
-Learn about the emotions you're portraying. If you've never been really afraid, hide in your bathroom with a knife afraid, read accounts and speak to people who have, what the brain does in an urgent situation, how people respond to death and trauma. If you do write mental illness, research. See what people with that illness are tired of seeing in fiction, what they want to see more of. Psychological people is about people, and to make it hit home, you need to build people who feel real.
