Best Time to Buy a House

Buying a home is one of the most significant financial decisions of one’s life. As a result, buyers should want to find any ways to save on the final price tag. One of the most influential factors on a house’s price tag is when you choose to buy.

What factors should you consider when buying a home?

To ensure you buy your next home at the right time, you may want to consider everything that can affect the home price.

Time of Year

It might come as a surprise, but the time of year impacts your home buying journey. The market shifts seasonally, and inventory is constantly fluctuating. For example, inventory is typically higher in the summer than in winter, but prices may be higher at the beginning of summer vs. the end. Keep in mind that seasonal fluctuation is more prevalent in areas with drastic weather changes.

Annual Market Trends

Interest rates and the state of the economy also affect housing prices, though these are more challenging to predict than seasonality. The best way to ensure you are on top of the market is to follow market forecasts from publications you trust. However, remember that these are merely predictions and not guarantees.

Personal Finances

Your finances are the most crucial element to consider as your financial condition directly determines your buying power. You should know when the right time to buy is despite the time of year and market trends by knowing how much you can afford. Having a stable income is paramount, but ensuring you have enough savings and low debt compared to your earnings also play a role.

Even considering how home prices shift, your right time to buy will depend on what you require from your next home. Are you looking for the lowest cost or the most options?

In what month are houses priced lower?

Home prices typically take a dip during the winter months, with December and January being the lowest. According to ATTOM Data Solutions, between 2013 to 2018, the best day to buy a house was December 26th, with an average discount of 1.3%. 1.3% may not seem like a lot, but with home costs continuing to increase, it could mean a discount of thousands! Though, you shouldn’t plan your entire home buying journey around one day. Also, consider that winter is also a time of lower housing inventory. If you have a list of particular features, you might have a more challenging time finding a house that checks all of the boxes.

Due to holidays, the winter months will also have fewer buyers, which could mean less competition for you. For a seller to be listing their home during a period with fewer buyers could indicate that they are eager to sell, allowing you more room for negotiation.

When do most homes go on the market?

For home shoppers with extensive lists of “must-haves,” spring and summer will offer more inventory from which to choose. Aside from the weather being more pleasurable in general, spring and summer offer more flexibility for families with school breaks, so sellers will be more likely to list homes during this time.

However, that also means more competition. Homes typically sell quickly during busy seasons, and sellers are less likely to drop their prices or negotiate concessions. Competition is usually higher in more desirable areas like downtown or popular neighborhoods. If you find your dream home, be prepared to put in your best offer from the start!

When is the best time to buy a home?

Since winter, summer, and spring come with their own set of benefits and challenges, what is the best time to buy a home? Some would say that none of those seasons are the best time, and instead, August and September are the optimal times.

Late summer and early fall offer a large amount of inventory, but prices begin to drop on homes that have been on the market for a while. In 2019, the average home price dropped $7,000 in September while inventory only decreased by 10,000. Bear in mind that market trends vary locally, and these averages are not representative of all neighborhoods.

Still, working with a local real estate agent can give you a better idea of market ups and downs. Communicating your goal of taking advantage of the best time to buy will give your real estate agent a great starting point.

Is now a good time to buy a house?

While market trends can be hard to predict, 2021 is expected to be an excellent year to buy a home. The Federal Reserve expects interest rates to remain mostly stable through 2023, meaning that the historically low rates of 2020 may continue. While national interest rates do not directly impact mortgage rates, they impact economic trends, indirectly affecting mortgage rates.

However, it should be noted that the new presidential administration may influence interest rates, so take current predictions with a grain of salt. Trade negotiations or a weakened economy could mean less buying power and more financial instability. Keep in mind your local trends and make plans to buy as markets rise. Sometimes, factors such as an increase in population or a new shopping center can be enough to send prices up.

When is the best time for me to buy?

We’ve discussed the various elements that can influence the best time to buy, but ultimately, only you can decide when your best time to buy is.

While market conditions may not be under your control, there are ways to prepare and ensure you are ready for when the time is right. Make sure your finances are in order. Having low debt and reasonable savings can set you up for some great mortgage options. A pre-approval before shopping for a home may also be beneficial as it ensures you have funding ready to back up any offer, especially if you need to move quickly.

Knowing how to choose the right mortgage can be a challenge of its own, but our mortgage consultants are experts ready to assist you with any questions you might have.

*Loan approval is subject to applicant’s qualification for a loan program. On Q Financial does not guarantee that each applicant will receive a loan.

About the Author

Before opening On Q Financial in 2005, John Bergman originated and funded 450 units a year as a loan officer. He founded the company with just $1M of personal life savings—committed to his vision for building the best independent mortgage organization in the industry.

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