Buying a home is easily one of the most significant financial decisions you’ll make throughout your life. It requires planning, saving, and the right timing. But what factors should you consider when planning the timing of your home purchase?

As you’d expect, you want to buy your home when prices are the most competitive and the interest rates are low. These objectives don’t always line up perfectly, but there are some strategies you can use to maximize each.

We will walk you through figuring out the best time to buy to maximize variety in your home search, the best time for finding the lowest price, and explore how COVID-19 is impacting these typical market patterns.

Buying When Inventory is High and Prices Are Dropping

The general standard for the “best time to buy” is when inventory is still high, and home prices are dropping. This ordinarily happens around the fall, in the August to October time frame.

Buying when inventory is just starting to dip and prices are decreasing ensures there are enough homes still on the market; that way you have your choice of options and features. It also means that sellers may be more willing to negotiate because they will want to seal the deal before prices drop too sharply.

Buying When Prices are the Lowest

It might seem intuitive enough that the best time to buy a house is when prices are at their lowest, but buying when values are low also comes with its own caution: inventory will also most likely be at its lowest levels.

When inventory is low, you won’t have as many choices, and you might have to sacrifice on the checklist of items you’re expecting from your new place. This is typically in the winter, from December to February.

There is also a point at which the low inventory levels will cause the pendulum to swing and trigger a rise in prices. Naturally, as demand outstrips supply, it drives a price hike, bringing more homes on the market, and the cycle continues.

Buying When the Most Houses are Going on the Market

As you might be realizing, there are different aspects of each of these timing strategies that can complement what is most important to you about your home purchase. If getting the best deal is your jive, you will do well in the high inventory, dropping prices span, or the lowest price timeframe, before values begin to rise again.

On the other hand, if you’re looking for some must-have features or the best home on the block, you’ll do well when inventory is at its peak. In the spring, starting around March and topping out in June, there are typically more options available and you’ll have the best shot at finding your dream home.

Like everything in life, having a wide variety to choose from will also bear its own cost: this is when prices will most likely be at their highest too. This is because both supply and demand are rising in tandem, and competing buyers may be willing to bid higher if they have their eye on the same home.

How These Models are Changing with COVID-19

Unlike previous recessions, homes are selling faster than ever despite COVID-19. Additionally, interest rates are near historic lows, which helps lower your mortgage cost.

While real estate is still in high demand, some sellers are hesitant to put their homes on the market during a pandemic. This has caused increased competition among buyers and an unexpected seller’s market. Together, these factors mean that your financing will cost you record lows, but you may pay a premium on the property itself.

One piece of buying advice that remains evergreen is to consider your financial situation above all else. You should buy when it’s the right time based on your personal finances and the market outlook. No one can predict exactly how real estate will fluctuate, so instead, take advantage of the current market conditions considering your financial health too.

A Quick Review

Here’s a quick synopsis for you to reference as you prepare to enter the home buying process:

  • For the most choice in home selection, shop in the spring or summer. This period usually kicks off around March and tops out in June. You might pay more, but you’ll also be more likely to find your dream home.
  • For more negotiating power, shop in the winter. Inventory will be lower, but if you strike before demand outstrips supply, you should be able to find a great deal.
  • Always consider your financial situation. You’re best equipped to take advantage of the market conditions when you’re fully prepared, having planned ahead and saved for a down payment. Make sure your personal finances are the primary driver in any home buying decision-making.

Our loan officers stay up-to-date with market trends and are expertly equipped to give you advice taking into account your personal finances and the market you’re shopping in.

Connect with our team today to get advice on starting your home buying journey.

The included content is intended for informational purposes only and should not be relied upon as professional advice. Additional terms and conditions apply. Not all applicants will qualify. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. This is an advertisement. Prepared 2/18/2021.