Best Time Of Year To Buy A House

The real estate market has been in a hot phase for at least two years, characterized by rising prices and bidding wars. Many buyers have resorted to all-cash offers to beat the competition, not to mention paying well over the asking price.

Recently, however, the market is showing signs of slowing down. Amid fears of a recession and rising interest rates, the volume of existing home sales fell 14.2 percent year-on-year between June 2021 and June 2022, according to the National Association of Realtors (NAR).

At the same time, the seasonality of real estate activity, upended by the pandemic, has begun to return to more traditional patterns. That means spring and summer could once again be the busiest times of the year, while fall and winter could become slower months again.

Average cost of buying a home in the US

The cost of US homes has been rising steadily lately. In June 2022, the median selling price for existing homes increased 13.4 percent year over year to hit a record high of $416,000, according to NAR. Here is a monthly overview of the average house prices for the past year.

Source: National Association of Realtors data
June 2022 $416,000 up from $366,900 in 2021
May 2022 $408,400 from $355,000 in 2021
April 2022 $395,500 from $340,700 in 2021
March 2022 $379,300 versus $326,300 in 2021
February 2022 $363,700 from $310,600 in 2021
January 2022 $354,300 versus $303,600 in 2021
December 2022 $358,800 from $309,200 in 2020
November $358,200 from $310,800 in 2020
October 2021 $355,700 from $313,000 in 2020
Sep 2021 $355,100 from $311,500 in 2020
Aug 2021 $361,500 from $310,400 in 2020
July 2021 $364,600 from $305,600 in 2020
June 2021 $366,900 from $294,400 in 2020

Median home prices have skyrocketed for years — a whopping 124 straight months of annual increases, according to NAR. This sidelines many prospective buyers and especially first-time homebuyers. Affordability is a major concern, as are fears that the market could expect a correction given such strong price growth. However, experts, who rely on median sales data to gauge the overall health of the market, say the outlook remains good.

Buy a house in winter

Traditionally, homebuyers get a better deal on purchase prices in colder weather. A 2021 report by ATTOM Data Solutions shows that buyers who closed in October paid the lowest “above-market premium” for home purchases, at just 2.9 percent. December is the next best bargain with premiums of 3.4 percent, followed by November and January with 3.9 percent each. (By comparison, buyers who closed in May typically paid an 11.5 percent premium.)

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In an overheated housing market, however, it is not necessarily a matter of course to find a bargain in winter. “In the last two years it hasn’t been cheaper at all [here] buying a home in the winter,” says Keri Rizzi, a realtor at HomeSmart Homes and Estates in White Plains, New York. “But if the market corrects further in the coming months, it could prove true once again that the best deals come in winter.”

The costs you pay to movers are generally cheaper in winter too. “Movers tend to charge less in the winter because demand falls,” says Bill Gassett, a RE/MAX real estate agent and owner of Maximum Real Estate Exposure based in Massachusetts. “The peak moving season is spring through summer, and mover prices across the country reflect that.”

advantages

  • Less competition: In general, fewer buyers are looking for houses in the winter, which means there is less competition. “Less competition means more bargaining power,” said Dino DiNenna, a broker at Southern Lifestyle Properties in Hilton Head, South Carolina.
  • Lower prices: Home selling prices are directly proportional to the competition in the market, says DiNenna: “Competition is less in the winter, so median selling prices are also low at this time of year.”
  • Extended agent support: In the winter, real estate agents will likely be more available to guide you through the buying process than they would be in the peak summer season. “Because there are fewer buyers in the market during the winter, real estate agents enjoy a more flexible schedule,” says DiNenna. “That means you can expect better attention and personal advice from your agent in the winter.”

Disadvantages

  • Less Inventory: Normally there are fewer houses on the market in winter. “During the snowy months, vendors may not want to move,” says Rizzi. In addition, “parents may not want to change their children’s schools during the school year, and sellers realize they are not getting a prime price for their homes and may wait until the more expensive spring sales season.”
  • weather difficulties: Depending on where in the country you live, winter weather can make house viewings significantly more difficult. Closures may even be postponed due to weather conditions, Rizzi says.
  • Home searches can be difficult: It can also be more difficult to inspect homes in cold weather. “You can’t tell the condition of a roof when there’s snow on it,” DiNenna points out.

Buy a house in the summer

It’s no secret that real estate prices tend to be higher during the peak summer season. According to Redfin data and Fit Small Business statistics, more homes sell above list price between April and August than at any other time of the year.

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Still, there are few tactics you can use to save money if you’re hoping to buy during this most competitive time of year. If your schedule is flexible, consider waiting until the end of summer to make an offer on a house. “The last two weeks of August are a great time to buy because so many other buyers have given up their search for the summer and are vacationing,” said Katie Severance, a realtor at Douglas Elliman in Palm Beach, Fla. “Also, sellers worry and fear that an offer may not come at all, so their motivation is increased at the end of August.”

Another option is to search for fixer-uppers that are priced for sale. “If you’re savvy and want to practice your HGTV skills, then roll up your sleeves and look for homes that need an update,” says Rizzi.

Homes that are sold by the owners rather than through a real estate agent or agent can also provide a savings opportunity. “Properties for sale by owners, particularly those that have weeks or months left on the market, may be weary of the non-stop inquiries and ready to sell to a savvy buyer,” says Rizzi.

advantages

  • More Inventory: The increase in summer deals means shoppers have the luxury of choice. “As more homes become available on the market, you likely have a variety of options to choose from,” says DiNenna.
  • Visibility: In the warmer months, buyers can get a more comprehensive view of potential homes. “Summer offers buyers the best opportunity to see every inch of a property to really get a feel for the bigger picture and layout of a home,” says Rizzi.
  • Move easier: School is out and the weather is usually nicer, making the move more manageable than in winter.

Disadvantages

  • Increased competition: You’re certainly not alone when it comes to summer home shopping – this is the peak season for the real estate industry and the most competitive.
  • Higher prices: As competition increases, so does multiple bids and ultimately higher prices. “During the summer bidding wars are intense and multiple bids are common,” says DiNenna. “That’s why the prices are higher at this time of year.”
  • Higher moving costs: Movers’ prices are also influenced by supply and demand. And in the summer, when demand increases, so do the prices you pay to a mover. All that hard work in the heat might not be so pleasant either.

Other factors affecting housing costs

  • Mortgage Interest: When interest rates rise, buying a house becomes more expensive. “If interest rates go up just one point, buyers lose about 10 percent of their purchasing power,” says Severance. “That pre-approval for a $500,000 house a few months ago [may] Now just allow the buyer to afford $450,000.”
  • Missing Inventory: An undersupply of apartments also causes prices to rise. In recent years, demand for homes has far outstripped supply – although there are signs that shortages are easing, which could lead to a slowdown in home prices.
  • High Inflation: Rising inflation has a noticeable effect on the overall cost of living. Buyers who previously felt ready to spend some of their savings on a home may now prefer to keep it for the ever-increasing cost of day-to-day expenses.
  • recession fears: When consumers are nervous about the economy, especially with the prospect of a recession, they tend to hold back or even stop spending altogether. “This has an immediate impact on housing costs — sometimes so immediate that it feels like the real estate market changed overnight,” says Severance.
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