When Is the Best Time to Buy a Home?
Home sales tend to rise along with the temperature. According to Realtor.com, 50% of homes are sold in summer. But if you want to get the best deal—and avoiding a bidding war—your odds are best when the weather turns colder and the days grow short, says Lawrence Yun, chief economist for the National Association of Realtors.
Year after year, closings in January tend to show a dip in prices, suggesting that buyers who made offers in November and December got the best deals, he says. In the summer of 2014, for example, median home prices climbed past $220,000, only to drop below $200,000 in January of 2015. Median home prices nearly hit $240,000 the following summer, only to move down again in the late fall.
“Some of this is driven by the types of houses that sell in the winter months,” says Yun. Families with school-age kids often account for larger, pricier homes, and they prefer to buy in the summer when kids are out of school.
Knowing this, many sellers don’t list their homes later in the year, and many pull their listings in the late fall in hopes of starting fresh in the spring. Sellers who stick with it, theory goes, are the most motivated. (Note: A RealtyTrac analysis of home sales over the past 15 years pegged October as the best month to buy at a discount, 2.6% less than the fair market value at that time.)
To be sure, buyers who shop later in the year may be able to negotiate a better price, but there is a possible tradeoff—less selection.
That’s because inventory of homes for sale typically starts to decline in September, Yun says, with the biggest dip around the holidays. Historically, it drops 10% in December, with little improvement in January. “Inventory begins to measurably increase in the spring,” he says. “Over the last four years it looks like a 10% jump in inventory from March to April.”
Certainly, there are markets that defy these trends. Winter destinations, for example, often see a surge of activity in the late fall and winter, as snowbirds and tourists hit the open house circuit. Similarly, demand for smaller homes and condos tends to be relatively steady throughout the year, says Yun, because buyers and sellers typically aren’t beholden to school calendars.
It’s important to know your market's quirks. In the end, however, the best time to buy a house really depends on what makes the most sense for your situation. No seasonal discount is worth rushing into a decision, paying a higher interest rate, or buying the wrong house.