One of the questions that we often get asked is, “What is the best time to buy a house?”
Seasonality has much to do with supporting factors in the housing market such as inventory, purchase price, and competition in the market. For example, during winter, housing supply is usually limited due to weather conditions making moving more difficult, whereas spring provides more inventory (generally speaking), but because of this, higher competition with buyers may cause prices to rise.
In addition, broader market conditions play a significant role when appropriating the best time to buy, as well as individual buyers’ personal needs.
The housing market broken down by season:
Spring
- Warm weather may mean houses typically show better
- The end of the school year means it will be easier to juggle a big move
- There is likely plenty of inventory, but also plenty of buyers – high competition may end in bidding wars and a natural increase in price
Summer
- Waiting until the end of summer gives great upside since most families want to get settled before the new school year. This means sellers will slash prices to close a deal faster
- There’s a better chance of timing your sale and purchase together since summer introduces the maximum amount of new buyers to the housing market
Fall
- After the hustle and bustle of summer ends, remaining sellers will usually lower their prices and provide an opportunity to get a deal
- Most sellers want to move and be settled before the holiday season, so this gives buyers more negotiating power
- There is normally less inventory, but also fewer buyers, so less competition, and generally more quality time with real estate agents and lenders
Winter
- Most sellers will suspend listings during the holidays, but those that remain on the market want to sell as quickly as possible
- This can draw potentially lower prices as well as perks from both the seller and real estate agents that want to make a sale (think reduced closing costs, upgraded appliances, free home inspections, etc.)
- During winter, the closing process tends to be speedier since lenders process fewer applications during this season and real estate professionals are typically more accessible
Other housing market conditions to be aware of:
- Mortgage rates tend to follow the Federal Reserve’s rate
- Take into consideration the life of the loan – the apparent savings from a good purchase price on a house may be quickly offset by a higher interest rate, making a future refinance more convenient, when interest rates improve in the future
- Housing market trends vary by location – moving to a “hot” city may bring higher prices and lower inventory versus a smaller town outside of the city
So, all of this taken into consideration, when is the best time to buy? The short answer: it depends.
The best course of action is to speak with a mortgage lender to make sure employment, credit score, and finances are in order so you can feel confident taking on the responsibilities that come with homeownership.
If you have any questions about the housing market and what your options may be, give us a call at (760) 930-0569 and one of our loan officers will assist you.