The housing market is in constant flux. The supply of available homes, interest rates and demand from buyers can all dramatically affect your home search. With so much to consider, potential homebuyers might wonder if there’s a best time of year to purchase a house. Many factors come into play, and I’ll cover several of them here, but, ultimately, the best time to buy depends on your particular circumstances and financial situation.
How seasons can affect homebuying
Peak homebuying season tends to overlap with spring, which can mean both increased inventory and demand. This can be a great time of year to look for a new home, but be ready to encounter more competition, higher offers and potentially steeper prices. You’ll likely experience similar market conditions in summer — especially as parents and families tend to move between school years.
Read more: Wondering which mortgage might be the right fit? Take our quiz to find out.
Homebuyers searching in the fall and winter seasons may have the benefit of lower competition and, as a result, the possibility of lower prices and higher negotiating power. But the number of available listings will likely be lower during the cooler months, so you could have fewer homes to compare. During this time, sellers may be eager to offload their homes, especially in parts of the country with cold, snowy winters. If you make a purchase, keep in mind: You might be moving in the snow or ice, so consider setting aside a little extra for professional movers.
Lastly, if your area doesn’t have distinct hot or cold seasons, the weather is less likely to affect the housing market (but other factors, like school schedules, may).
Assessing the economy when buying a home
If home prices go up by a percentage or two annually, the overall impact shouldn’t feel significant since the cost is spread across the life of your mortgage. And while changing interest rates can significantly impact how much you pay in interest on top of your principal mortgage payment, it doesn't mean you should avoid buying when rates are elevated. Calculate your monthly payments with current interest rates — if the payments are within your budget, you can always consider refinancing if rates fall in the future.
Calculate how much your monthly payments will be with current interest rates — if the payments are within your budget, you can always consider refinancing if rates fall in the future.
Other economic factors can also affect home affordability, especially in your local area. Prices and demand may increase for neighborhoods growing in popularity. If property taxes spike in your area, buyer demand may diminish. A real estate agent can help you understand these trends in your area, but you can also research comparable properties that have recently sold.
Major geopolitical incidents like the COVID-19 pandemic can cause interest rates to plummet, which improves affordability — but these events are often unpredictable, so you can’t count on them when you’re planning.
Prepping your finances for a home purchase
While seasonality and the economy can play a meaningful role in the homebuying process, the most important component will always be your personal financial readiness. Think about your current status with the money side of home buying, like having a:
Strong credit score
Well-stocked emergency fund
Savings for a down payment
Stable, predictable income
Reliable budget
If you are well-prepared when it comes to these factors, incremental changes in the market may matter less in your overall financial picture. Be sure to also consider the incremental cost and time that goes toward owning a home, like landscaping and ongoing maintenance.
It can also be helpful to think about the life events that may be in the cards over the next few years. Are you planning to spend on a wedding? Will you need to relocate for job opportunities or career advancement? Do you hope to grow your family? Are you looking for a specific community? While some details can be hard to predict, imagining your future can help inform your homebuying decisions. Look over your plan and figure out where you might have some flexibility — staying adaptable about where you live, the timing or other details may help smooth out your buying journey.
Is now the time to buy?
Just like the style and location of a home, the right time to buy is deeply personal. My perfect time is different from your perfect time. But if you’re feeling overwhelmed, real estate agents and financial advisors can provide professional guidance and context to help you finalize your timeline and budget as you search for your next home.
