You’ve got your down payment ready to go, your credit report is sparkling, you have a real estate agent lined up and you’re about to hit “submit” on that mortgage preapproval application when you stop to wonder: Is now the right time?
It’s an important question. Your ability to buy a house you love (at a price you love) isn’t just affected by your own financial circumstances, it’s also determined by what the larger real estate market is doing. And the real estate market can be pretty fickle.
The season, month and even day or week that you buy can impact many different parts of the home buying process, including how many options you have while shopping and how much you end up paying at closing.
Some of these factors will be influenced on a smaller scale by what your local real estate market is doing. In this case, your agent will be the expert to turn to. But on a larger scale, what can buyers expect while house hunting during different times of year?
In general, the best time to buy a house often ends up being in the late summer or early fall. Around this time, there tends to be less competition than at the peak during the spring and summer, but still a fair number of houses on the market. In the winter months, there are fewer homes on the market, but buyers often have more negotiating power, since there are fewer of them out home shopping.
Let’s take a closer look at what these trends mean for home buyers.
Best Time Of Year To Buy A House
Real estate markets experience seasonality, which means there are certain ups and downs that we can expect to happen at specific times, year after year.
As we already mentioned, summer tends to be the peak for the home buying market, and winter tends to be slower. If you think about it, this makes a lot of sense. In summer, kids are in between school years, so moving won’t disrupt their learning as much as if they were in the middle of the semester. The weather also tends to be nicer; wouldn’t you rather go house hunting in warm, sunny weather than in cold, snowy weather?
However, there can be good, strategic reasons for buying in the winter months as well.
For More Choices, Shop In The Spring Or Summer
Since the market is so active during the warmer months, you’ll have plenty of homes to choose from.
However, so will the other many home buyers who are also in the market for a new home during the peak season. If you’re looking at properties that have highly sought-after features, expect to have to go up against stiff competition to get into the house you want. If you’re in a particularly hot market where bidding wars are the norm, be prepared to give your best offer up front and don’t expect any seller concessions to sweeten the deal on your end.
However, not all neighborhoods will be so competitive that you have to fight your way into your next home. While there will be more shoppers during peak season than any other time of year, the amount of competition you’ll encounter will usually depend on what area of town you’re shopping in. High-end neighborhoods or homes in the heart of the downtown, for example, will likely have more competition than other areas.
For More Negotiating Power, Shop In The Winter Months
While fewer homes are on the market during the colder months, the homes that are available offer potential cost-saving opportunities for savvy home shoppers.
There are two reasons this time of year can be the ticket to getting into a home you love at the best possible price.
First, because there are fewer shoppers looking to buy a home, you’ll have less competition. Not only do you not have other buyers driving up the price, but because sellers know that interested buyers are few and far between during this season, they may be more open to sweetening the deal for you, such as accepting lower than asking price or offering concessions or more generous contingency periods.
The other reason this is a great season for buyers is that sellers who list their homes in the winter are more likely to be highly motivated to sell. Since there tend to be more benefits to selling in the summer, most people will avoid listing their home in the winter unless they have to. If you’re negotiating with someone who’s trying to sell quickly due to a job relocation, for example, you have the upper hand when it comes to bargaining for what you want.
However, it’s important to note that this advice is aimed at those who live in areas that experience large fluctuations in weather between the seasons. In more moderate climates or warmer areas that don’t typically experience cold, snowy winters, differences between peak and off-peak seasons may be less pronounced than in areas that experience the full range of seasonal weather changes.
Best Month To Buy A House
Nailing down a more specific time to buy will depend on your goals and your local real estate market. If you plan on strategizing your entrance into the market as a buyer, it’s best to team up with a real estate agent who works in your area, as they’ll be the local expert.
If you’re looking for a good sweet spot between the high inventory of peak season and the attractive prices of the winter, consider buying in August or September, when inventory is still fairly abundant, but the market has cooled off enough for you to negotiate a good price.
If you’re most interested in what month is most likely to enable you to get the best price, we dug into the data for you, taking a look at the past 2 full years of sales price trends. For this, we used the U.S. Census Bureau’s Median and Average Sales Prices of New Homes Sold in United States report. In the line graph below, we referred only to the median home prices to get a better look at what the typical homeowner pays for a home.
Looking at the graph, we can see that in 2017, home prices were at their lowest in February, but actually peaked around November and December, before falling slightly by January of 2018. In 2018, November was the most affordable month for home buyers, while March was the most expensive.
What does this mean for you? First, it’s a good reminder that, while the market does experience some predictable seasonality, things change from year to year and fluctuations in the larger economy can interrupt or even reverse the usual rhythms of your local real estate market.
Our take on the best month to buy a home? While it’s hard to say for certain, January and February are the most likely to offer you the lowest prices in your market. However, as you can see from the chart, even typical seasonality might not be the best determining factor in what price you pay, and depending on where you live and what kinds of houses you’re looking at, you could potentially get a good deal at any time of the year.
If you want even more insight into the best month to buy, conduct your own research based on publicly available home sales price data in your specific area.
Best Week To Buy A House
Is it even possible to know the ideal week for buying a home? Maybe.
According to REALTOR.com®, the best week for home buying in 2019 was the week of September 22, which marked the first week of fall. Why was this the best week? According to their analysis, this week was the height of the sweet spot we mentioned earlier, where competition slowed down but there were still plenty of available homes on the market.
Obviously, the house hunting and buying process rarely takes place within the span of 7 days. Instead of aiming for a specific week to begin your home search, you’re likely better off consulting with your local real estate agent to think about ways you can strategize your offer based on what your local market is currently doing to give your offer the best chance of getting accepted by a seller.
Best Day To Buy A House
Harder still is getting the data on the best date (or day of the week) to buy a home, but a few different research firms have tried to give us an idea.
RealtyTrac, a real estate information company based in Irvine, California, has been tracking single-family home and condo sales since 2000. According to RealtyTrac’s 2015 analysis, the best day of the week to close on a home is Monday, when buyers will see an average discount of 2.3% below the full estimated market value at the time of sale, followed by Friday, when they’ll get a 2% discount on average. The worst day of the week for closing is Thursday, with a 1% discount
RealtyTrac also looked at the best day of the year to buy, and found that those who closed on their homes on October 8 saw the largest average discount of 10.8% below estimated market value.
ATTOM Data Solutions, a real estate database company that owns RealtyTrac, also looked at the top days for closing on a home in its 2018 analysis. It found that, based on home sales data from 2013 – 2017, the day that offered the best discount was December 26, when buyers got an average discount of 1.3% below estimated market value.
This seems to suggest that the particular day you buy doesn’t matter as much now as it did just a few years ago, as the potential discount you’re getting has shrunk significantly in recent years.
Is It A Good Time To Buy A House?
As we head into 2020, potential home buyers are probably wondering what the new year will look like for those hoping to enter the housing market.
A big piece of this puzzle involves what mortgage rates will do in 2020. Though this can be hard to predict, there are a few different clues we can use to forecast what’s likely to happen.
For starters, the Federal Reserve has indicated that it plans to keep rates steady in 2020. While Fed rate decisions don’t directly affect current mortgage rates, they can create economic trends that lead to mortgage rates trending up or down.
Recently, mortgage rates have remained fairly low. Experts seem to think this will continue into 2020. However, keep an eye on the trade war and the state of the economy. If trade negotiations go south, it could actually end up lowering interest rates. Unfortunately, this would be due to a weakened economy, which could affect other factors that are important, like your buying power or financial security.
While it’s important to consider the economic factors that affect the costs of buying (and borrowing to buy) a home, you also need to take into account your own financial situation. The right time to buy a house is when you know your finances can handle the responsibility of owning a home, you feel personally ready to buy a new home, and when you are comfortable enough with the current market conditions to buy.
If you’re starting to consider whether owning a home for the first time or buying a new home would be a good move for you, now is the time to start looking at what’s available and keeping an eye on the market to get an idea of the trends in your area.
Once you make the decision to enter the home buying process, be sure to work with a real estate agent you trust to ensure you feel confident throughout the process. Additionally, getting preapproved for a mortgage can help you get an idea of how much home you can afford, so when you’ve found your dream home, you can make an offer with the confidence of knowing what you can afford.