Read Time: 3 Minutes|
August 12, 2021
In the real estate market, some seasons are better than others regardless of market conditions. Seasonality can impact inventory and purchase price due to broader market trends, the state of the economy and mortgage interest rates. However, the best time to purchase a home isn’t always when inventory is highest or when prices are the lowest.
Obviously, trying to determine the best time to buy can be difficult. However, the good news is that ultimately the best time to buy is when it makes sense for your personal finances and moving timeline. In other words, the best time of year to buy is when it’s right for you. With that in mind, let’s take a closer look at some purchase factors based on different seasons and months of the year.
According to a Zillow analysis of 2016 listing and sales data, 26% of buyers paid above list price in April while in November, just 15% of homes sold above the asking price. Therefore, the brief window between late fall and early winter can provide an opportunity to save some money on your purchase price. Heading into this fall, rates are still near all-time lows and lower interest rates can help put a higher-priced home within reach for some buyers.
By contrast, home prices are generally lower during winter than they are in spring. However, inventory is usually limited – and the moving process may be more difficult, depending on the weather in your area. Homebuyers in the winter will have less inventory to choose from yet will also have more flexibility and more negotiating power. This is because sellers are often motivated, and those that do list in winter typically want to sell as soon as possible. They may even be more willing to throw in a few extras. The downside is that fewer homes are for sale during the winter and over the holidays so the selection will be limited.
Although there are a higher number of houses for sale in spring, there are also more people shopping so competition among buyers often causes prices to rise. As a result, a home you buy during the spring months could cost you a little more. Conversely, if you want more homes to choose from and are okay with paying a little more, spring will be your ideal time of year. Specifically, the Zillow data showed that the month of April saw the highest number of new listings.
One caveat is that regional weather is also a factor. Although spring typically has double the active listings compared to winter, this pattern is less pronounced in warmer areas of the country.
The early days of summer are considered peak real estate season in the U.S., however, according to the data from Zillow, August is the month with the most cuts in price. It’s also the last month until April rolls around again that listings remain relatively high. Looking at the year, price cuts occurred most often between July and September.
In most areas, the market slows down a bit as it gets closer to August, and late summer has historically presented opportunities to find deals, because sellers looking to sell often reduce prices even further. In summation, late summer can offer once in a year balance between lower prices and inventory.
Factors ranging from local demand, weather, interest rates, the job market and the overall health of the U.S. economy all come into play when attempting to answer this question.
Low rates can make a new home more affordable and that's good news for homeowners who want to buy, make renovations or even refinance.
No matter what time of year you decide to buy, knowing how much house you can afford is always a good idea before embarking on your search. Newrez can help you get into your dream home. For additional information, visit some of our articles. Also, be sure to check out our mortgage calculator to estimate how much home you could buy and get your mortgage process started.
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