The Best Time of Year to Buy a House: Tips to Have the Upper Hand
Whether you’re entering the market as a first-time homebuyer or looking to upgrade to a new home, timing your purchase matters. As you start your search, you’re probably wondering what the housing market is like and if current market conditions favor buyers or sellers. You might be asking what the best day or month to purchase a home is. And how do you successfully navigate fluctuating interest rates and rising house prices during your house hunting process?
This guide will help you on your journey to homeownership. Read on for tips and tricks on the best time of year to buy a house so you can be ready for the homebuying process.
Understanding the Current Real Estate Market
The state of the current real estate market will impact the best time of year to buy a house. To better understand market trends and how to best time a real estate transaction, here’s an overview of what it means when there’s a seller’s market or buyer’s market.
What Is a Buyer’s Market?
A buyer’s market refers to a time when the real estate market has a surplus of inventory available, meaning that buyers have more houses to choose from and typically have more negotiating power than the sellers. In a buyer’s market, the amount of available houses exceeds the number of qualified buyers. When this happens, it is not uncommon for potential buyers to offer less than asking price or ask for seller concessions.
A seller’s market is characterized by a low inventory of houses on the market, but a surplus of buyers. This type of market occurs when low supply meets high demand and, as a result, gives pricing and negotiation power to the seller. Because there are fewer homes available, potential buyers are forced to compete with each other. This can lead to higher prices for the houses on the market and bidding wars among buyers.
There are a number of factors that may contribute to creating a seller’s market, including:
- Low interest rates
- Lack of houses on the market
- Lack of new builds and new construction
Researching the Local Market
Now that you know how to identify a seller’s market or buyer’s market, you might be wondering the best way to research your local market. To get a grasp on current real estate trends, spend some time exploring. Many online portals publish national and regional existing-home sales prices and information on real estate market trends, such as mortgage rates and home prices. The U.S. Census Bureau is another avenue to explore market conditions and get acquainted with the local market.
Factors to Consider When Buying a House
When considering the best time of year to buy a house, here are some additional factors to keep in mind.
Mortgage rates have an important part to play when determining the right time to buy a home. Interest rates impact affordability for the homebuyer, as high interest rates will make monthly mortgage payments more expensive. Homebuyers might save money if they wait to buy until interest rates are low. Since that is not always possible, many homeowners opt to refinance their mortgage later on when interest rates have decreased.
The Time of the Year
Research has shown that seasons can play a role in house prices. Traditionally, the winter months are seen as the best time of year to embark on the homebuying process. The National Association of Realtors found that the slowest months of selling activity are November through February, with January being the slowest.
Meanwhile, spring and summer are historically seen as the peak seasons in the real estate industry, according to the National Association of Realtors. In the Bay Area, the spring has typically been known to have the busiest homeselling months.
Consider Your Individual Needs When Deciding the Best Time of Year to Buy a House
While certain months are often considered the best time of year to purchase a home, you should always take a closer look at your unique situation to determine what will actually work best for you.
Look at Your Financial Situation
The best time of year to buy a house varies from buyer to buyer based on their unique situation. Taking a look at your financial situation can help you determine the amount you are able to offer and how much you are willing to put towards a down payment.
Traditionally, it is recommended that your monthly mortgage payment shouldn’t be over 28% of your monthly pre-tax income and 36% of your total debt.
If you can, it’s sometimes recommended to put 20% toward a down payment to avoid private mortgage interest rates (PMIs). PMI is an additional expense so you can typically save money by avoiding it in the long run.
Decide If It’s the Right Time for You to Make a Move
After considering your individual needs and your financial situation, it’ll be up to you to decide if it’s the right time to make a move. From thinking about monthly costs to evaluating your current and future needs, these 15 questions will help guide you on the way to becoming a homeowner.
Start Finding Your Dream Home Today
Now that you have a better understanding of the best time of year to buy a house, you’re one step closer to finding your dream home. At Aalto, we are dedicated to making the homebuying process easy and simplifying real estate transactions from search to close. Our self-service real estate platform directly connects you with homesellers, so you can enjoy more transparency, less pressure, and more savings than in the traditional real estate process.
We provide support to homebuyers from start to finish. Whether you need assistance on how to make an offer or when to buy, Aalto’s team of experts is there to guide you every step of the way to a new home.
With Aalto’s easy-to-use platform, you can shop for homes online from the comfort of your living room. You’ll even have the opportunity to embark on a virtual tour and get insider information on any home, without the need to hire a traditional real estate agent. Homebuyers can even get up to 1.5% cash back when they purchase with Aalto.
Aalto is committed to offering flexibility and transparency in the homebuying process, making it easier than ever before to purchase a home. By shopping with us, you can be confident in your home purchase.