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The Best Time to Buy a House: A Complete Guide

by | Feb 16, 2022 | Buying

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If you’ve found yourself wondering what the best time to buy a house is, there are a few different routes to get the right answer. Some recommend studying the market trends for the best interest rate. While others recommend a specific month, and even a best day of the week to buy a house. But ultimately, the best time to buy a house comes down to what makes the most sense for your unique situation. 

To help guide you through the research process, this article outlines key questions to ask, and some helpful data points to consider. 

The Market for Home Buyers

There are three real estate markets buyers find themselves in:

A balanced market

A buyer’s market

A seller’s market

The type of market within which you’re trying to buy a home will dictate the level of competition you’ll face. Recently, the United States has experienced a strong seller’s market. 

This means it’s a difficult time to be a home buyer because there are more buyers in the market than there are available homes to purchase. As a result, buyers need to move quickly when a new listing hits the market, and make a competitive offer as many will face a bidding war. However, a competitive market can be a good thing for buyers who are successful in winning a home. As competition for homes stays high, home values increase. Thus, home buyers gain equity in their purchase rather quickly in many cases. 

The Best Time to Buy a House: Affordability

A key consideration in your effort to time your home purchase is affordability in your market. This is influenced by the state of the housing market and whether it leans in the buyer or seller’s favor. In recent months, housing inventory has hit all time lows. As a result, home prices have increased by up to 30% in some markets. For many, this increase has been counteracted by historically low interest rates. Home buyers are taking advantage of this market to save big in the long run on interest. 

Ultimately, affordability varies by location. In popular markets or trendy neighborhoods, home buyers could encounter even higher prices and a smaller number of homes to choose from. This is when it comes in handy to consider other factors that influence the best time to buy a house, such as seasonal trends in pricing and inventory. 

Your Local Market

As you try to determine the best time to buy a house, keeping affordability in mind, look closely at your local market for trends. Ideally when house hunting, you will find a home to purchase in an area where home values are increasing. This allows you to start building equity in your investment almost immediately. In markets like Charleston, home values increased 25.8% in 2021. So while it may seem like home prices are increasing drastically, so are your chances of building immediate equity in your new home. 

There are a few key factors that can help home buyers determine if the market they’re searching in is an up and coming location. 

  • Growing in popularity
  • Real estate development 
  • New retail spaces and restaurants are opening

Best Time to Buy a House: The Data

The data tells an interesting story about how buying a home varies based on the time of year. Overall, spring and summer are typically good times to buy in terms of convenience, as temperatures increase, and there are more homes on the market to choose from. However, each season offers unique advantages and challenges to buying a home. 

The Best Month to Buy a House

The two most common ways to define the best time to buy the house relate to available inventory, and list price. 

Available Inventory

Buying a home in a seller’s market can be a long, difficult process since there is limited inventory to choose from. The best time to buy a home as far as available inventory is concerned, is the month of May or June. 

Spring is typically the peak time of year for housing supply and offers the most homes from which to choose. But, it’s important to note that the number of buyers in the market also tends to increase during this time of year. Often, home buyers with families prefer not to move during the school year, thus May and June are the ideal months to list a home for sale while still having plenty of time to find a new home. 

List Price

If the number of homes to choose from is less important than the price you’re willing to pay, then winter is the best time for you to buy a house. Specifically, the month of December as the market sees the least amount of competition around the holiday season. Home owners are hesitant to sell in December because this would mean likely moving over the holiday season. Not to mention planning a move in less than ideal weather in many markets across the country. 

As a result, inventory typically hits an annual low each December with very few homes for buyers to choose from. However, the sellers who have listed their homes are often motivated, and more likely to entertain a variety of offers. With that, it’s common for many buyers to pause their search over the winter months to avoid moving during the school year, or cold weather. Thus, buyers in the month of December are less likely to get into a bidding war with less competition for available inventory. 

The Best Time to Buy is Different for Everyone 

The best time to buy a house doesn’t always come down to the list price or available inventory. The ideal time differs based on a buyer’s unique circumstances and financial situation. Not to mention, owning a home is a lifestyle change from renting. As a homeowner you’re responsible for repairs, and the cost that comes with them. 

These are just a few things to keep in mind as you consider purchasing a home, and the ideal timeline for doing so. 

Job Security

Buying a home can be a great way to lower your monthly housing costs compared to renting. However, it means getting approved for a home loan and this requires two months of pay stubs to verify employment. A recent job change won’t necessarily keep you from getting approved for a loan, but your lender could require additional documentation to verify your employment history. 

It’s important to feel confident that you are in a stable place with your job as you plan to take on a monthly mortgage payment. If you’re planning to make a drastic career change, or go back to school, it may not be the best time to consider buying a home. 

The Best Time to Buy a House for Your Finances 

Buying a house means having savings for a down payment, and any closing costs, not to mention moving costs. The amount of money you need to put down on a home varies by the type of loan. However, your credit score is important regardless of what type of loan you’re hoping to secure. 

Typically, mortgage lenders offer the best interest rates to applicants who have a credit score of 740 or higher. But, it’s possible to qualify for a home mortgage loan with a credit score of just 600 in some cases. If you have a limited credit history, hefty credit card debt, or less than ideal credit in general, it might be a good idea to delay purchasing a home until you’ve improved your score. By waiting to purchase a home until your credit score is above 700, you could save yourself thousands of dollars in interest over the lifetime of your mortgage. 

Settling Down 

While buying a home can help you save on monthly housing costs compared to renting, the amount of savings often relates to how long you choose to own the home. Ideally when you buy a home you’ll live in it long enough to see its value rise, providing you with equity in your purchase and a higher resale value. It’s important to keep this in mind when considering closing costs for a home purchase, the cost of repairs, and real estate commissions. 

Keep in mind that buyers whose home appreciates in value and who choose to sell after less than two years of ownership will be subject to capital gains tax. Ultimately, it’s important to consider how long you see yourself living in a certain area to ensure purchasing a home is the right financial decision for you. 

The Best Time to Buy a House: The Bottom Line

If available inventory to choose from is your top priority, then May and June are the best months to purchase a home. When listing price is most important, consider making an offer in the month of December to get the best deal on the limited inventory available. Overall, a number of factors influence the best time to buy a house, but your personal situation is the most important factor. 

We recommend getting started by spending some time researching your local market to understand current trends and inventory levels. If you choose to work with a real estate agent, they can take this leg work off your hands. An expert agent provides you with a local market analysis, and recommendations based on your needs. Local Trelora real estate agents can provide you with lender recommendations, monthly market trends, and they even split their buyers agent commission when you buy, up to $6,000 in cash at closing! 

Also, by working with an expert real estate agent at Trelora, buyers ensure that their bids are more precise and therefore more likely to succeed. Speak with an expert agent today to learn more.

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The information contained in this blog is for general information purposes only, and while believed to be accurate, Trelora assumes no legal responsibility for accuracy. Information provided within should not relied upon as legal advice. Please consult with your local advisors for independent information regarding availability and applicability in your market.