When it comes to buying a home, not all times of year are created equal. While there is some difference depending on your geographic location, certain times of year are more competitive than others. A more competitive time will drive prices in your housing market up. You want to avoid these times of the year if you want to land the best deal on your new property.
In general, prices tend to drop during the autumn and winter months. We’ll dive deeper into why this is and what you need to look at in your own home market before making a purchase. As always, a qualified real estate agent is a great tool for guiding your home search, and they can provide specific information about your situation.
The Best Time to Buy a Home
Let’s be clear, there is no single best time to buy a home. There are pros and cons of all times of the year. During some months, you’ll find that prices are the lowest. Yet, you’ll also have to deal with a smaller selection of properties. On the other hand, prices might be up but there’s a wider selection.
According to Nerdwallet, prices are lowest in the winter. Prices can be up to 8.45% lower in most metro areas during January and February, so it’s worth waiting until the weather cools off. What’s the reason behind this trend? It’s most likely the weather itself. The colder months make it significantly less pleasant to search for homes, not to mention many families are still recovering from additional holiday expenses.
However, you’ll also want to consider your unique location. If you’re in a warm climate, for example, you’re not likely to see a big dip in the housing prices during the winter months since there isn’t as much extreme weather. The best way to learn more about the natural rise and fall in your local housing market is to compare your location on websites like Zillow and Redfin.
The Worst Time to Buy a Home
Now that you know that the best times of year to buy a house is in the fall and winter, let’s talk about the other side of the spectrum. When should you avoid buying a house? As expected, for most metro areas, that time of year to avoid is summer. June and July experience the highest number of homes on the market as well as an increase in homebuyer competition.
Because competition is higher in the summer months, you’ll more likely need to bid on your favorite property, driving up prices. However, having a larger selection might be worth it to you. As we said before, there is no “perfect” time to look for a home, but it is important you understand your real estate market before you start your search.
Last but not least, don’t forget to consider interest rates when you consider the best time to buy a home. Interest rates naturally rise and fall throughout the year, and you don’t want to borrow when rates are at their highest. Unfortunately, there is no cut-and-dry way to anticipate home interest rates, but you can look at projections from the Federal Reserve for a better understanding.
As you can see, there’s a lot to think about before you jump into the real estate market in search of your perfect home. Buying a home is a big decision with many layers. As long as you’re smart about when you plan to buy a house, you can find a great deal.