When is the Best Time to Buy a House?
When is the best time of year to buy a house? The best month to buy a house? If you are buying a house for investment in order to rent it out, timing is very important. For many people, summer and spring are the best seasons for finding and buying a real estate investment property. Since it is a more pleasant time of the year, investors are more likely to get out and prospect. Summer and spring are also considered ideal for real estate investing because buyers can look at yards and roofs when they are not covered in snow.
However, though it is not usually considered the best time of year to buy a house, purchasing a home during winter comes with a wide range of advantages for real estate investors.
When is the best time of year to buy a house?
Although peak inventory periods may vary by location (see “the best time to buy a house may depend on location” below), generally more homes are on the market in March, April, and May.
That’s because, usually, a wave of buyers hit the market after hibernation during the winter months, and sellers list their homes to take advantage of that demand — meaning spring is the best season to purchase a house if you want a larger selection of homes.
What is the best month to buy a house?
Spring isn’t the best time of year to nab a deal, however. According to a comprehensive 2015 study by RealtyTrac of 32 million sales of single-family homes and condos since 2000, buyers typically snagged the best deals in October, where the average sales price was 2.6 percent below the market value of homes sold.
If saving money is your goal, then finding a house in the winter may be best. Following October, these are the best months to purchase a home to get a lower sales price:
The “sweet spot” if you want a healthy supply of homes and affordable home prices? According to a Zillow analysis of 2016 listings and home sales, it’s November, where just 15% of homes sold above asking price and inventory levels were still strong.
When you’re ready to buy, visit Unlock’d to compare the pricing trends with the click of a button.
What’s the worst month to buy a house?
The study found the worst month to purchase a home was April, when buyers purchased at an average premium of 1.2% above market value. No matter what time of year you buy a house, you need to make sure you’re getting the best mortgage rate and terms.
Is 2020 a good year to buy a house?
Yes, if you’re looking to lock in a low mortgage rate.
Government-sponsored mortgage giant Freddie Mac’s Primary Mortgage Market Survey put 30-year fixed mortgage rates at 2.86% with 0.8 discount points paid for the week of September 10. Mortgage rates dropped below 3 percent for the first time ever the week ending July 16.
The caveat? Homes are getting more expensive. In July the median sales price of existing homes jumped 8.5% year over year to $304,100, according to data from the National Association of Realtors (NAR). Meanwhile, the median sales price of new homes in June hit $329,200, up 5.6% from last year, the U.S. Census Bureau reported.
If you decide now is the right time for you to buy a home, use an online mortgage calculator to determine what your potential monthly mortgage payments would be. You can also visit our website for your house hunting needs, especially if you’re hoping to move quickly on a mortgage.
The best time to buy a house may depend on the location
Homebuyer activity can vary by location. While nationally the peak month for average views per listing on realtor.com in 2019 was April, January ranked as the top month in 20 of the 100 largest metro areas, including New York, Los Angeles, Chicago, and Dallas, according to a report from the property listing website.
The weather may also play a factor when buyers start their home search. Beach towns, for example, frequently see an influx of visitors — read: potential buyers — in warmer months.
One way to determine the best time to buy a home in your locale is to contact a local real estate agent who has their pulse on the market. Although you have access to a wealth of housing data online, an agent can help you contextualize this information.
How far in advance should you start looking for a house?
One of the most common mistakes homebuyers make is they start their house hunt too late.
It’s never too early to start poking around listings online or to start stopping by open houses to get an idea of what you can afford in your area. However, you don’t want to wait until you’re ready to make an offer on a house to explore your mortgage options, since many home sellers require buyers to present a mortgage pre-approval letter from a lender with their offer.
When you’re ready to apply for a mortgage, check out our flat fee broker service to get personalized rates in no time and without affecting your credit score.
If you’re looking for a deal, buy a house in the winter
Since most prospective buyers would rather casually scroll through online listings in PJs than go open-house hopping in puffy coats, winter is considered the off-season in the real estate world. Not everyone can spend Christmas Eve or Easter Sunday out looking for houses, but for those able to get out into the market, the opportunities are enormous. With far less competition to worry about, buying on any holiday drives down the price, but during the winter months specifically, the advantages are even more pronounced.
Sellers strategically wait to list their homes during a period when they will generate the most interest, which is a big reason why there’s less inventory on the market during the colder months. So while you may not be spoiled for choice, you’ll have less competition for the houses that are up for sale at this time, which were either left over from the spring/summer or newly listed for any number of unique reasons.
If someone puts their house up for sale during December or January, buyers can be confident that the sellers are eager to close the deal. Otherwise, they would have waited until the more lucrative spring months. After all, not everyone has the luxury of choosing when they sell their house, as any number of circumstances may have forced them to do so. This means that the buyer will have much more leverage during the negotiation phase. In the winter, houses take much longer to sell, and it is more often the buyer that is dragging out the process, waiting for a better deal opposed to the spring market where the seller tends to make the process longer waiting for the right price.
Winter is clearly the best season to obtain the best property for the lowest price
By carefully scheduling your home buying adventure into the housing market, the wise home buyer can save themselves tens of thousands of dollars.
If you’re a first-time home buyer looking for a little direction in order to better navigate today’s housing market or you would like to get pre-approved for the mortgage you need to get moving, feel free to contact our team at Unlock’d. We will make sure that you have as much leverage as possible when negotiating a fair price for your dream home, and we look forward to helping you sign that deal.
6 Reasons Why Winter Can Be the Best Time of Year to Buy a House
Here are some of the reasons why you should go house shopping in the winter real estate market:
1. Motivated Sellers
Homeowners that decide to put up their homes for sale during winter often do so because they want to sell immediately. Some of the reasons forcing them to move during winter could be family issues, financial constraints, and job relocation. In addition, if the property has spent many cumulative days on the market, sellers are often more eager to enter a negotiation. When sellers are motivated, the real estate investor has the upper hand when it comes to negotiating the terms of sale, purchase price, and anything else that comes with the transaction. In other words, winter is usually a buyer’s market.
2. Allows for Home Inspection in a Challenging Climate
Winter is usually the toughest season for properties, whether in places like Washington that see a lot of snow or even locations like Los Angeles or San Diego that may see more rain during this time than in other seasons. Therefore, shopping for a house in winter allows you to inspect the investment property under stressful conditions before you sign on the dotted line. Does ice accumulate on the roof? Does cold air seep in under doors or through windows? Are there any leaks? Is the heating system generating enough heat? These are some of the questions you need to ask when inspecting the investment property.
3. Less Buyer Competition
Since spring and summer are seen as the best time of year to buy a house, the real estate market is busiest during those months. More listings and intense real estate bidding wars are common real estate market trends in these seasons. However, this activity begins to fade through fall and into winter. Very few real estate investors are willing to brave the cold weather and walk through the snow to look at investment properties. Though the housing inventory levels are lower during winter, it is the best time to buy a house since there is less competition from other buyers. You will have an advantage when negotiating prices with sellers and higher chances of closing deals. Christmas day especially can be a great day to buy a house for investment as most people will be celebrating.
4. Lower Sale Prices
As the temperature cools down, so does the market. Real estate agents have more time to focus on you and your needs. Inventory will increase, enabling realtors to show you more properties within your price range.
During the summer months, sellers busily improve their homes, keeping painters, plumbers, handymen, and landscapers busy. As the fall approaches and demand wanes, contractors are more inclined to lower their bids. They may also have more time to devote to the details of your project. Perhaps more importantly, mortgage lenders are no longer bogged down in summer sales and can respond more quickly.
5. Realtors Are Less Busy
The busiest seasons for realtors are usually summer and spring when most people are looking for homes. Since fewer people are hunting for a property in winter, this is the best time to invest in real estate. Realtors can devote more time to meeting your needs since they are not busy.
6. Favorable Mortgage Rates
If you intend to take out a mortgage, winter is the best time of year to buy a house. You can get a favorable interest rate from your lender. Since fewer customers are applying for home loans in winter, there is a higher chance of getting better financing terms. This could save you lots of money in the long run. Winter 2019/2020, specifically, is experiencing low mortgage rates so take advantage of them now!
What about your personal finances?
Before you decide to buy a home, be aware of the reality of your finances. The decision to enter into home ownership requires more than simply a down payment and a monthly mortgage payment. A degree of financial stability is essential to realizing your dream of home ownership with confidence. Take some time to review your current monthly expenses, and then factor in the additional costs of purchasing a new home to see where your budget nets out. Home prices and interest rates will mean nothing if you aren’t prepared to not only purchase, but maintain a home.
Does your budget match the cost of home buying and ownership?
The last step is to determine if your budget matches up with the current cost of homes. If not, explore different housing options, or determine what financial goals you need to hit before making the purchase decision. If math isn’t your strong suit, schedule a meeting with a financial advisor. He will ensure that your finances are in good shape.
Building a budget may not be the most glamorous step you will take on your road to homeownership, but it truly is the most important. All good homes are built on a solid financial foundation that will help the home – and your investment – stand strong for years to come.
Conduct your own local research
It’s important to remember that real estate markets vary. The best time to buy a house in your area may differ from overall national trends. It’s best to ask local realtors to determine if your target market fits general patterns.
Prices may also vary by circumstance. If demand is weak because an area has been hard-hit by an economic downturn, home prices may fall. These drops may not dovetail with the normal seasonal trends for that region.
The reverse may be true, too. A neighborhood that’s becoming more desirable can fetch higher prices.
Research pricing trends
Home buying requires work and that includes developing a sound understanding of pricing trends. Such information can increase the likelihood that you find the right house at an affordable price. Visit real estate websites to look at a variety of trend statistics to get a feel for the market in the area where you’re thinking of purchasing.
The sale-to-list-price ratio, is a percentage that indicates if homes are selling at, below or above their listing prices. If the number is above 100%, homes are selling above their listing prices, and vice versa. Median list and sale prices indicate the average value of home prices in a particular area, which can help you discern if homes tend to sell within your budget range. Many sites generate these numbers monthly or even weekly, so it’s easy to keep an eye on the trends. Once you’ve closed on your new home, you’ll need to protect yourself and your house.
The best time to buy is when you’re ready
The key takeaway here is that the optimal time to buy a home depends on what makes the most sense for your situation. No seasonal discount is worth rushing into a decision, paying a higher interest rate, or ending up in the wrong house.
Save up for a down payment, watch your credit score, and make sure your paycheck can comfortably handle a mortgage payment. Just don’t wait until the last minute to prepare for your mortgage application.
Ready to start your search and find the best investment property before 2020 ends? Then get started with Unlock’d and complete your search to buy a house today!