When considering the optimal time to purchase a new home, seasonal real estate patterns can significantly impact the process, affecting housing inventory and home prices. However, recent economic events have disrupted traditional trends, with home prices remaining high in various real estate markets due to the surge caused by the pandemic. Furthermore, mortgage rates have increased due to the Federal Reserve’s efforts to combat inflation, leading many potential buyers to wait for prices and rates to stabilize.
Despite these disruptions, a recent report from real estate data company ATTOM indicates that seasonality still plays a role in finding the best deals. Based on their analysis of more than 51 million single-family home and condo sales from 2011 to 2022, May emerges as the worst month for homebuyers to find a deal. After the winter months, there is pent-up demand and strong competition among buyers, leading to bidding wars and higher prices. Buyers in May typically pay the highest average premium of 12.8% above market value.
On the other hand, November stands out as the best month to find a favorable deal on a house. During this time, buyers pay the lowest premium of the year, at 6.3%. There is usually less competition from other buyers as many have already completed their home purchases before the start of the school year. Additionally, sellers may be more open to negotiations during this period, especially for listings that have been on the market for an extended time.
The fall and winter months are generally considered the cheapest time of year to buy a house due to the slump in home inventory. Shorter days, colder weather, and the busy holiday season lead to fewer families putting their homes up for sale. Although buyers may have fewer options during this time, the reduced competition and motivated sellers can result in better deals for those willing to shop during the off-season.
While spring and early summer offer a greater selection of homes due to increased housing inventory, this period also sees homes selling at premiums above market value. Buyers tend to pay the highest premiums in May, June, April, March, and July. Additionally, competition intensifies during these months, often leading to bidding wars and inflated prices.
Ultimately, the best time to buy a house depends on various factors, including your readiness for homeownership from both a financial and personal standpoint. It’s crucial to consider housing market trends specific to the city or neighborhood you’re interested in, as well as the current mortgage rates and your ability to afford a down payment and other homeownership costs.