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Knowing when to buy a house is as important as knowing when you’re ready to buy a house. Your financial stability and the nature of the market are key factors that usually drive the decision. The economic situation also factors into the equation and may influence whether or not you buy.
Historically, Spring triggers the buying season; this is traditionally when sellers put their homes on the market and buyers flock to real estate websites to see potentially new homesteads. The housing market tends to cool off along with the weather during the Fall and Winter months.
2020 ushered in a global pandemic that brought the economy to its knees. As a result, it’s difficult to rely on traditional real estate trends. The real estate sector wasn’t spared during the nation’s widespread quarantines and shutdowns: real estate transactions were at record lows in April and May.
Some have posed the question “is now a good time to buy a house?” Let’s consider a few things before answering this question.
The simple answer to that question is “when you are ready.” However, it doesn’t stop there, as you should consider additional factors as well. If you have made up your mind that you’re ready to make that move, the next step is taking a close look at your finances.
There are things that you will need to consider before beginning your home search on the financial front, such as getting pre-approved for a home loan, improving your credit score, and setting aside money to pay closing costs.
You can’t control how the market will behave at a certain time, but you can certainly up your game by working on these factors. Having a good credit score increases your chances of getting a loan. It also helps you land a lower interest rate from lenders.
In the same vein, having a larger down payment also serves your interest as it means you will have higher equity in your home. A larger down payment also keeps your loan-to-value (LTV) ratio, which is the ratio of the amount of the loan to the net worth of the property, lower.
A lower ratio means better mortgage rates. Saving what you can is the best financial strategy when buying a home no matter when you choose to do so.
Here’s a little-known fact about real estate: property prices typically are lower during the winter months, with prices being optimal at the start of the new year. As the year progresses prices tend to take an upturn, peaking in the spring.
So, if the idea for the best time of year to buy a house means the lowest rates near you, then you should strongly consider buying in winter, preferably in December or January.
The flip side of buying a home in winter is that real estate activity remains low. This is sometimes referred to as a hibernation period since there aren’t as many new listings on the market as in the spring.
Spring is a season of rebirth. This holds true for the real estate market as well. If we peek into past years’ listings, we see thousands of homes pop up on the market during the spring season.
New listings start pouring in the market at the start of April and continue until around June. If buying a house means a home that best suits your lifestyle and fulfills all of your requirements, then spring is your season to buy.
The downside of buying in Spring is that the activity remains in full swing so it is likely to increase competition as well as home prices. If you can afford to increase your budget then spring is the best time to buy a house.
To be honest, it doesn’t necessarily mean this is the best time to buy a house. The pandemic slowed market growth and the negative impacts are likely long-lasting. Thanks to the ongoing economic uncertainty, thousands are uncertain of their job stability and income.
On the contrary, interest rates are at historic lows, so it might be a golden opportunity to buy if you have already completed homebuying prerequisites such as arranging down payment and closing costs of the deal.
It’s a good idea to hire an experienced agent. The agent will know the details of the market which he or she can then share with you. Your agent can not only advise you about which month is best for buying a home but he or she may even be able to break down which week or day is best.
Although you might have to spend some money on hiring them, an experienced agent is worth investing the money.
The “best time of the year to buy a house” boils down to a single factor: your financial status. If you can afford to pay a down payment and can ensure you’ll maintain the cash flow necessary to secure and consistently pay your mortgage installments, then this is probably the best time given the low-interest rates.