Is it better to buy a house in the summer or the fall? What about buying a home around a holiday? If you’ve asked yourself, “When is the best time to buy a house”, we have some answers that you might be searching for.
First and foremost, the best time to buy a house should always begin with your financial health. This includes a sufficient credit score, savings to go toward a down payment and closing costs, as well as steady income to cover monthly mortgage payments.
If you are squared away on this front, amazing. Let’s talk about timing in relation to the real estate market. Of course, you want to get the best deal possible, but you need to keep in mind that the market is very much impacted by seasonality, as well as broader economic factors. And while national context is key for understanding interest rates and the job market, your local market may be just as, if not more so, important to your decision to buy.
What outcomes are you looking for exactly? Well, should you time your purchase right, here are key advantages you may expect:
- More choice of homes on the market
- Less competition
- Greater willingness of sellers to negotiate and lower their prices
- Lower monthly mortgage payments
Unfortunately, these advantages don’t necessarily correlate with the same time of the year. It’ll be important for you to prioritize your top needs when buying a home, and here are our key insights to help you navigate this process.
Key takeaways
- Prioritize your financial health by building good credit, saving for down payment and closing costs, and maintaining a steady income.
- Consider your needs and goals when deciding on the best time to buy a home, with winter months offering less competition and spring/summer having more options.
- August and September are typically the best months to buy, with negotiating power and a good selection of homes still available.
- While the exact day to buy isn’t crucial, trends show that Mondays may offer better discounts, and December 26 could be ideal due to lower competition.
- Avoid making significant financial changes before buying a house, and be cautious about purchasing during high-interest and mortgage rate periods, even if the pandemic offers affordability and flexibility with virtual tours
When are the best months to buy a home?
If you have flexibility in regard to when you buy a home, you will be at a definite advantage. There are certain months that have historically proven to offer particular benefits. For example, if you care about having an abundance of options on the market to choose from, then you’ll prefer to shop in spring and summer. With the school year wrapping up, this is the time when many families will opt to relocate. In turn, the market is saturated with more choices and potential dream homes.
However, if you’d prefer to not fight the competition, then the winter months are for you, especially January and February. There are fewer homes for sale but also fewer buyers. This gives you, the buyer, more negotiating power in the transaction. You may need to compromise on your housing selection (i.e. the neighborhood or the aesthetic of the home), but you’re more likely to get a better deal by shopping for a home in the winter months.
Generally, the best-for-all time is early fall, specifically August and September. There are still a number of choices remaining on the market, and you should have some pull to negotiate your purchase price.
Is there a best day to buy a home?
Trends show that you are likely to get a better-discounted price on certain days of the week. For example, historically, it has been better to close on Monday, with an average 2.3% discount versus Thursday with less than 1% below market value.
The date that will provide the best discount varies from year to year, and ultimately, the exact day is less influential than understanding your local market and the trends specific to that community. However, interestingly, December 26 has been suggested to be an ideal choice, as there is less competition in the market and in turn a greater willingness by sellers to accept a lower offer.
What times should you avoid buying a house?
If interest rates are high and mortgage rates are high, that’s a sure sign to consider waiting, if you can, as it’ll mean higher mortgage payments for you. However, most of the time, it comes down to personal factors. For example, if you have existing debt that you’re currently struggling to pay down, and if you think your credit score has been weakened, again consider investing time into building back your financial health. It’ll be worth the difference in the rates that lenders will offer you.
Don’t make significant changes to your finances leading up to a purchase. This includes anything big, like buying a car, which might affect your credit, as well as moving money around between accounts or investments. Lenders will probe such decisions like this, which may negatively impact your approval for a mortgage.
Is it a good idea to buy a house now during the pandemic?
The current real estate market is a striking contrast compared to earlier this year when sales dramatically decreased as people were sheltering at home. The market is now continuing on a high, and while this may seem surprising, it has been brought on by government stimulus and low mortgage rates. People are willing and eager to buy a home to ride out the pandemic, and rightly so.
It is a great time to capitalize on low mortgage rates, an abundance of homes on the market, and some people’s desire to relocate to other areas of the Country. If you’re financially stable and in line with the points we’ve touched upon, then definitely consider buying now, even during the pandemic. There’s no guarantee that these low rates will last, and it’s doubtful they’ll get any lower.
However, you should consider the potential pros and cons before jumping in:
Pros
- Affordability: incredibly low-interest rates continuing.
- The pandemic looks likely to continue, so ideal to settle in a new home now and adjust to your new neighborhood and/or enjoy more space.
- Flexibility to have a virtual tour and to schedule an appointment slot that works for you.
Cons
- Low-interest rates mean more competition.
- Lenders are adjusting their standards during the pandemic; they may have more rigid restrictions such as requiring 20% down.
- Limitations on the group size of in-person tours (i.e. you may need to go without your realtor).
- Inventory may be more limited, depending on location.
Looking ahead
There is no singular best time to buy a house. You need to determine when you are ready to buy a home and which pros or cons you’re willing to deal with. However, if you are confident that now is the time from the perspective of your personal finances, then you should absolutely consider buying now and capitalizing on these record-low mortgage rates, while you still can.
Contact us today
Contact Hero Home Programs™ to learn about rebates, special grants, and other ways to save on your home purchase. Their specialists work tirelessly to give you the freedom of homeownership while saving upwards of thousands of dollars. Request a consultation with us today!
