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Best Time to Buy a House

Sep 10
Category | Helpful Tips

Best Time to Buy a House

RMS knows that buying a house is one of the most important and exciting decisions you can make. A first step is to determine the best time to start both the home shopping and home financing processes.

The housing market can seem like a daunting space to dive into, especially for first time homebuyers. 2020 and 2021 presented notoriously difficult challenges for homebuyers, but there are some tried and true strategies, and indicators, you can use to help time your home search and home financing efforts.

When Should I Start the Process?

Like many financial topics, the answer to this question is based in large part on your personal objectives and needs. It's important first that you consider what you want to get out of the house-hunting process. Do you have a firm deadline by which you need to find, purchase and move into a new home? In this case you may have less flexibility both with respect to available housing inventory and home financing alternatives. If, on the other hand, you aren’t in any rush that provides the opportunity to take more time to locate your “dream home” and consider a variety of home financing alternatives. This will also allow you to take both your local housing market and national trends into account when looking for a home.

High housing inventory months

House shopping activity, and inventory levels, do vary based on geography. According to Zillow, there is a specific time of year that tends to have the highest number of listed houses. Though you may end up paying more, spring and the early months of summer usually give you the most shopping options. The winter months generally offer fewer homes, as a rule of thumb. Zillow’s data suggests that April may be a prime month to buy if you are looking for the greatest range of inventory.

Timing effect on affordability

Mortgage rates fluctuate any time of year. For the price-conscious, it may be best to avoid shopping in the spring or summer if possible. Because of this, if your circumstance allows it, fall and early winter may be good months to start browsing. In addition, there is traditionally less competition on the market at this time, allowing a potential homebuyer more negotiating power. After analyzing information from 23 million single-family homes and condos sales, ATTOM data solutions concluded that a home buyer willing to close the day after Christmas would likely get a below-market-value price.

Best of both worlds

If you're somebody who is looking for a home price that’s within reach and the option to pick from a larger pool of listings, there is a window of time that could give you the best of both worlds. Data from suggests that the average house price in large cities increases 9% from January to June, indicating that house prices rise during the warmer months, along with inventory levels. Again, here is where you should evaluate your personal situation. If you live in a rural area, this data set might not impact you as much as someone who lives in a city like Baltimore, for instance. Traditionally, as the cool weather sets in, housing inventory and demand falls, as do market prices. Buyers will avoid the competition that comes with busy real estate seasons and could even have opportunities to save money if they shop in Autumn.

Real estate market fluctuations

You might already know that the real estate market is going through a tumultuous period due to the COVID-19 pandemic. For example, 2020 was a sellers’ market, due to the lack of homes on the market. The rising cost of houses did not dissuade people from buying in 2020. This is made clear by the fact that 5.64 million existing homes were sold last year, the highest number since 2006, despite fewer houses on the market than ever. This is what is known as a seller's market.

The new construction housing market remains volatile, as evidenced by the drop in sales of newly built homes. This is the lowest level since April 2020, when the market was booming. The pandemic affected many different supply chains, and consequently the cost of construction supplies skyrocketed. In turn, this impacts the asking price for newly constructed homes.

Recap of evaluation

Spring/Summer: High inventory and possibly at a premium. The most new-home listings are typically in April.

Fall/Winter: Winter is considered an “off-season” for homebuying, so late fall and early winter is good for buyers on a budget.

August is the best of both worlds, still having plentiful inventory and benefiting from late summer price reductions.

Best time for you: When looking to buy a home, keep in mind that international, national and even local events impact your house-buying experience. The earlier you start the process, the more prepared you will be for a changing market. A professional will be able to guide you through the search, so you do not have to tackle this alone. Depending on your location and circumstances, the home financing process will typically take 30 to 60 days, so be sure to factor that into your home shopping timeline.

Finding the right home financing option

It's essential to start preparing to buy a house before you are 100% ready to buy, to help ensure you understand the process and are prepared to move quickly when the time is right. Some of the most important factors to consider are your credit scores, current interest rates and trends, and the size of the loan you will qualify for. An RMS loan officer can help you understand these factors during the pre-approval process, a vital and first step in your home buying journey.

Factors like location, finances, type of house, and local market conditions are all important to consider when deciding the best time to jump into the housing market. In addition to doing your research, having an experienced mortgage professional and a good real estate agent can make a world of difference in your home buying journey. The experienced team at RMS uses the right balance of communication, technology, and teamwork, providing a home mortgage experience you can feel confident about.

Contact us today to get started.