Best Time to Buy a Home

Timing isn’t everything when it comes to buying a home. However, it is a significant factor.

Your financial status and the length of time you expect to live in a home can also influence your decision. The timing of a home purchase is also influenced by macroeconomic and market conditions.

Historically, more homes are for sale in the spring and summer, while real estate markets slow down in the winter. However, the extent to which these changes affect your purchasing alternatives or prices varies by region. Furthermore, this year’s COVID-19 shutdowns have thrown the previous averages for a loop.

Last spring, the epidemic put some buyers and sellers on the sidelines, when you’d expect a frenzy of activity. According to Danielle Hale, chief economist at realtor.com, home sales fell 18 to 20% in May 2020, a traditionally active month. The dip corresponded to a drop in the number of homes for sale.

With so much uncertainty in the economy, it’s becoming more difficult to get a mortgage because lenders have gotten stricter with their rules.

When Is the Best Time to Buy a House?

Supply and demand, like with anything else, play a huge role in finding the best offer on a home. You want a variety of options (supply), but you don’t want to compete with everyone else (demand). You want to find a good balance without putting too much effort into predicting the home market.

Working with a local real estate agent can be extremely beneficial when it comes to identifying the optimum time to buy a house. Marietta Rodriguez, president and CEO of NeighborWorks America, a nonprofit housing counseling organization, advises purchasers to select a real estate agent who specializes in the area they want to live in.

“If they specialize in a place, they may have information that is extremely beneficial to the borrower,” Rodriguez adds. A local expert, for example, may be aware of a new shopping center on the way or a nearby home that will go on the market shortly.

The following are the year’s overall home-buying trends.

Winter

The real estate market tends to slow down in the winter as the seasons change. Because people are less active in the winter (who wants to move in the snow? ), inventory and demand are typically low. Prices may be lower—and you’re less likely to enter into a bidding war—but until you wait a few months, you won’t have a comprehensive view of available homes.

Spring

Homes begin to hit the market again in the spring. Realtors and sites like Redfin will offer more homes, giving you a plethora of options to choose from. According to Zillow data, April is the month with the most alternatives. However, bear in mind that other homebuyers will be looking, so have any mortgage application documents ready in case you find the perfect home.

Summer

The spring bustle of activity tends to carry over into the summer. In the real estate market, you’ll probably see a lot of inventory and a lot of competition. There will still be plenty of homes available, so don’t be afraid to act quickly if you locate your dream home at a reasonable price. Due to heavy competition, the option may no longer be available tomorrow.

Fall

The ideal time to buy a home is usually in the early fall. Before the school year began, many families had already settled into their new homes. However, compared to other times of the year, the quantity of houses on the market is still very large, and sellers may be ready to sell.

Remember that while buyers, on average, get better discounts in September, this may not be the case for you. Real estate values are influenced by a variety of factors, some of which are relatively local. A property half a block away from a busy crossroads may face more competition than one immediately next to it.

Is Now a Good Time to Purchase a Home?

In 2021 and 2022, the COVID-19 pandemic had a significant impact on the housing market, although it did not drive home prices to bottom out.

“The housing market’s supply is still relatively limited, and I think it comes as a surprise to some people, but home prices have remained relatively consistent,” adds Hale.

When the housing supply shrinks, a seller’s market develops in which the number of buyers outnumbers the supply of homes, and prices rise. However, this has not occurred in the majority of markets. In fact, due to record low mortgage rates, home purchases are on the rise. You can save thousands of dollars over the life of your mortgage if you can lock in low rates. If you have a good credit score and a stable job, there are options for you to apply for a loan.

However, you may have to pay a higher price for a home. The lower borrowing rates attracted a slew of new purchasers to the market, but the supply of homes did not keep pace. This means that, depending on the local market, you may face stiff competition. A home that would have been simple to buy a year ago may suddenly be flooded with offers, so you may need to act quickly.

Lending requirements, on the other hand, have become increasingly stringent. Although the standards aren’t as stringent as they were at the start of the pandemic in spring 2020, several lenders remain cautious due to high unemployment rates. For government-backed mortgages such as FHA loans, some banks have increased their FICO score requirements by 100 points. As a result, fewer home purchasers will be able to obtain a mortgage.

You may wish to take advantage of record low mortgage rates if your financial condition is stable. Even so, you shouldn’t feel rushed because there’s no evidence that interest rates will rise very soon.

Suggestion

Real estate is a local business. Working with a real estate professional who knows your market inside and out is critical to getting your timing just right.

You may wish to take advantage of record low mortgage rates if your financial condition is stable. Even so, you shouldn’t feel rushed because there’s no evidence that interest rates will rise very soon.

When Is the Right Time to Buy a House for You?

In the end, the best moment to buy a property is determined by your financial situation, ambitions, and personal schedule. The real estate market has its own eccentricities and tendencies, but they aren’t set in stone. Before you make an offer on a home, be sure you have all of your ducks in a row.

You should endeavor to get your finances in order before beginning the home-buying process. You can’t predict where mortgage rates will go or how the housing market will perform, but you can make efforts to ensure a positive home-buying experience.

You’ll make the entire process much easier if you set aside money for a down payment and closing costs while also working to improve your credit score. It is considerably easier to apply for a loan if you have a higher FICO score and more cash in the bank. But that isn’t the only advantage. Those with the best credit ratings get the best interest rates from lenders.

You can also save money by lowering your loan-to-value (LTV) ratio by putting down a larger down payment. The value of the mortgage is compared to the value of the property to determine your LTV. An LTV of 80% would apply to an $80,000 loan on a $100,000 home. Lowering your LTV can help you qualify for cheaper mortgage rates, and if your LTV is less than 80%, you won’t have to pay private mortgage insurance (PMI) on conventional loans. On average, PMI can cost up to 1% of the total loan amount every year. So, if you have a larger loan, not having to pay it could save you hundreds of dollars per month.

It’s also a good idea to learn about the many housing assistance programs available in your area. A housing counselor can assist you in determining whether or not you qualify for down payment or closing cost assistance. “I would strongly advise all first-time home purchasers to get help from a HUD-approved counseling agency,” Rodriguez says. Pre-purchase counseling and education services are available from a HUD-approved housing counseling agency. For pre-purchase counseling services, these groups can charge fair fees, but the prices must be stated up front. And, according to HUD, if you can prove you can’t afford the cost, these services must be supplied for free.