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How much does it matter to find the best time of year to buy a house?
While timing is always a significant factor when making one of the biggest purchases of your life, it isn’t going to be the only factor that matters.
Your financial situation and how long you’re planning to live in the house should also play a big part in the decision. Plus, the country’s overall economic health will dictate home purchases everywhere.
Historically, springtime and summertime will have more homes available on the market. Conversely, wintertime will typically see real estate markets slow down a bit. We’re emphasizing “historically” here because the COVID pandemic has thrown traditional home-buying timing for a loop.
Springtime typically shows a surge in real estate activity, but May 2020 saw a drop of 18 to 20% in home sales. And this spring is not following traditional models either.
The number of homes for sale increased for the first time (8% over last year) this May since June 2019, but the number of active listings decreased by 48.5% compared to May 2021. So, almost half as many homes are available compared to pre-pandemic.
For today’s real estate market, the best time of year to buy a house will involve knowledge about the traditional periods of home buying with an eye to the current market trends.
The best time of year to buy a house—historically
Like any purchase, supply and demand are the most significant factors involved—and the housing market is no different.
Each month of the year brings a new trend in new home purchases. So let’s break down each one to see where, historically, the best time of year to buy arrives.
Like the temperatures, the real estate market tends to cool down during winter. However, ATTOM Data Solutions found December to be when homebuyers get the best price and experience lesser bidding wars—paying over the asking price an average of 2% for November, 1.5% for December, 2.5% for January, and rising to 3.4% for February.
The best days to buy a home
If you want to get very specific, there are three days when the average home purchase falls below the estimated market value.
According to ATTOM Data solutions (pre-pandemic), three days in December—the 26th, the 31st, and the 4th—had discounts of 0.3%, 0.1%, and 0.1%, respectively.
Keep in mind that these are general statistics only, and local real estate markets will vary.
Once the weather starts to warm up, so does the real estate market. As a result, the number of homes listed by realtors is more significant in April and tends to have the most options for house hunting.
However, because more homes are available, the number of home buyers also increases, making for greater competition and increasing the chances of bidding wars.
The increased activity started in the springtime generally continues throughout the summer. As a result, higher inventory and higher competition will follow as well.
In higher demand with higher supply situations, homebuyers may have more choices to buy a home but will have to move quickly to secure one at an affordable price. In addition, fierce competition may remove the home you want from the available market sooner rather than later.
The fall is typically the overall best time of year to buy a house. Homeowners may have settled into their new homes in time for the school year, but the housing inventory remains relatively high compared to other times.
On average, September will yield better deals. But, as with any buying market, local market factors can affect house prices significantly. Moreover, this local variation can hold for cities, towns, neighborhoods, and even from street to street. As a result, local real estate agents can have valuable insight into your areas of interest trends.
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The best time of year to buy a home
The housing market has been affected by the pandemic in a big way during the last two years. However, housing prices have not bottomed out as some predicted.
Because of the historically low mortgage rates at the beginning of COVID, home purchases went up and days listed on the market fell. This trend continues even today, meaning homes are selling quicker than ever.
But throughout the pandemic, the increased clamor for houses was not matched by an increase in inventory. Instead, we had an increase in demand without an increase in supply because new homes were not being built, and many people were reluctant to move.
Now, lending standards have become tighter. Requirements may not be as strict as in the spring of 2020, but lenders are becoming wary due to high unemployment rates.
Some banks have tightened their credit score requirements, raising the minimum FICO score by 100 points.
The bottom line
Predictions about this year are fluid. At the end of 2021, Realtor.com‘s chief economist forecasted prices would remain high, there would be fewer homes, and mortgage rates would rise.
However, halfway through the year, the war in Ukraine and other factors forced the same economist to revise her predictions. As predicted, home prices and mortgage rates rose and will rise further this year, but home sales will likely cool off as buyers are priced out.
Because of this reduction in sales, the number of homes available is also expected to rise significantly.
Is now the best time of year for you to buy?
The best time or best season to buy a house will depend on your finances and your personal timeline and goals. The real estate market has always had its peculiarities and patterns. And, as you can see, they aren’t predictable with any certainty.
The best way to determine if now is the best time for you to buy is to get the right local real estate agent and the right mortgage company to advise you.
At Homefinity, it’s our business to give you an accurate snapshot of your home-buying options, according to your personal finances plus the real estate market at large and in your area.
The last thing you want is to find your dream home, only to discover that you get outbid by a better price offer or you can’t cover the closing costs.
Pre-approval is the best way to get the big picture of your buying power. Plus, it could give you the edge you need to put your offer to the top of the pile.
Contact one of our knowledgeable loan officers today for a free consultation. Together, we want you to get your dream home keys in your pocket.
Photo by Kindel Media