When Is The Best Time To Buy A House?
Carey Chesney6-minute read
December 02, 2021
Buying a home is a fun, but complicated, process. Understanding your personal finances, investigating home mortgages, finding a real estate agent – the list goes on and on.
Part of the process is about timing. Determining the best time for you and your family to make a move can be tricky, as there are many financial, logistical and emotional variables to consider.
You may also be wondering if the real estate market should influence your timing for buying or selling your home. In this article, we will dive a little deeper into determining the best time to buy a house.
When Is A Good Time To Buy A House?
The real estate market is influenced by many variables outside of your specific moving preferences and considerations. Broad economic factors, local housing inventory and seasonal real estate market shifts are just a few of them.
As the economy goes, so goes the housing market. Interest rates and the ability to buy homes are very closely related. When rates go up, homebuyers have less ability to purchase homes. When rates decrease, the purchasing power for home buyers increases. Currently, interest rates are historically low, so that’s the good news. The not-so-good news is many experts think rates are going to rise in 2022.
As most real estate agents will tell you, supply and demand play crucial roles in determining the movement of home prices. If supply goes up, home prices go down. If supply goes down, home prices will usually go up.
This year has been a seller’s market vs a buyer's market – one where demand is high, inventory is low, and home prices are up – by any measure. This has been tough for buyers, as high home prices and high buyer demand have combined to create bidding wars and buyers overpaying for homes.
Some hope for buyers is right around the corner, though. The home buying process can be affected by the seasons, and the fall and winter markets usually mean more affordable home prices in relation to the spring and summer markets.
What’s The Best Season To Buy A House?
Depending on where you live, the real estate market can be quite seasonal. Each time of year can present specific challenges and opportunities for buyers who are in the market for a new home.
Buying a house in the winter can be a great opportunity to find some deals in the housing market. Often homes for sale in the winter have been sitting on the market for a while which means they might be able to be bought at a discount. Sellers who listed their homes in the spring or summer and have not found a buyer yet might be getting desperate.
Most people like to search for homes in the spring and summer, so the winter market has less buyers to compete with. This means you can avoid the bidding wars that come with the warmer months.
Winter buying is not without its challenges, though. Cold temperatures and inclement weather make showings and inspections tricky. In addition, most people list their home for sale in the spring and summer, so inventory might be a bit lower in the winter.
Buying a house in the spring can be a completely different experience from buying in the winter. Home inventory is usually high, as most people like to list their homes in the spring. There are more buyers looking as well though, so the likelihood of getting into bidding wars increases.
Because there are so many buyers looking this time of year, home prices tend to go up. So, while you might have more houses to choose from, you might have a harder time getting your offer accepted and overpaying for your home if it does.
Buying a house in the summer is like buying in the spring, but a little less intense in terms of competition. While the market is still very competitive in early summer, prices go down later in the season, and many buyers take a home shopping break to enjoy the summer months.
This is a great time to continue your search and scoop up a home that others missed because they were busy relaxing on a boat or attending a 4th of July party.
Summer is also a good time for buying and selling at the same time, as it often is a balanced market – one where supply and demand are even and homes are neither over- or under-priced.
Fall marks the beginning of the highly motivated seller season. They are not quite as desperate as they will be if their homes stay on the market until winter, but they are getting antsy and eager to sell.
This is a good time of year to look for lower prices, but there will be less inventory as well. Finding that diamond in the rough may take a little more searching, but once you find it, you won’t overpay.
What’s The Best Month To Buy A House?
Let’s dive into a month-by-month comparison of inventory for 2020 to get a sense of which month might be the best for home buying.
The chart below, compiled with data from the National Association of REALTORS® (NAR), outlines a 2020 month-by-month comparison of inventory.
As you can see, inventory is often up in the warmer months and down in the colder months, generally speaking. Keep in mind that inventory is only one of many factors that indicate which month is the best for buying a house.
Is There A Specific Week Or Day That’s Best For Buying A House?
The key is to be ready to move quickly when you see a home you like listed for sale, regardless of what day of the week it is.
If a home goes on the market in the middle of the week, putting an offer in before an open house occurs can be a good way to beat the competition to the punch. If a home is listed on the weekend, waiting until later in the week to see it might mean you miss out. So, it really depends on the specific house and when it is listed.
In terms of closing on a home, aim for the middle of the week. That way, if wire transfers or other delays occur you are not battling with a weekend – when banks aren't open – to get it done.
Will 2022 Be A Good Year To Buy A House?
2021 was an excellent year to buy and sell real estate, with interest rates low and home values high. Any time things are going this well, there will be talk of a recession and the impact it could have on buyers.
When the market is red hot, the instinct most people have is to think it is too good to last. However, the instinct to “strike while the iron is hot” might be misguided when it comes to looking ahead to 2022, because it is looking like it will be a good year to buy a house.
So many people bought homes in 2021 that the pool of potential buyers for 2022 will be diminished. That means less competition for homes. In addition, inventory continues to rise, so there will be more houses to choose from.
How Do You Know It’s The Right Time To Buy A House?
The right time to buy a house is when you are fully prepared. The first step is making sure you have the money to buy a house. The best way to see if you are financially prepared is to consider the following factors.
- Do you have enough money saved for a down payment?
- Do you have a decent credit score?
- Is your debt-to-income ratio low?
- Can you afford the monthly payments?
- Do you plan to stay in one location for a while?
- Can you afford the costs of maintaining a home?
- Do you have enough money to maintain an emergency savings account?
Frankly, the best time to buy a house is when you're ready. The home buying process has a lot of hurdles in it and requires a lot of preparation on the part of the buyer. Plus, there’s a huge emotional component as well, especially for first-time home buyers. Trying to juggle all that while also closely tracking larger economic trends can turn what should be an exciting process into a huge headache.
While it can be helpful to keep larger trends in mind, you shouldn’t stress yourself too much with timing the market so that conditions are perfect when you start the home buying process. Conditions can change at the drop of the hat, and even the most seasoned of economic professionals have trouble foreseeing just what will happen next. Buy a house when you’re ready to do so, without worrying too much about whether it’s the “right” time to buy.
The Bottom Line: The Best Time To Buy Is When You’re Ready
The real estate market ebbs and flows depending on the year and season, but trying to time your home purchase on that is pretty pointless. Focus on making sure you are ready to buy and then determine the right time to do it that matches your unique needs. When you are ready, it’s a good idea to buy with an agent who can help you navigate the home buying process during any time of the year.
Viewing 1 - 3 of 3
Is It A Good Time To Buy A House?
Will 2022 be a good time to buy a house? Learn how housing market trends and mortgage rate projections will shape your prospects as a home buyer this year.
Rent Vs. Buy: Calculator And Decision Guide
The rent or buy conundrum has haunted prospective buyers for years. Read about the pros and cons of renting vs. buying a house to help you decide.