You’ve been saving for years. You know the area where you want to live. You’re ready to pull the trigger on buying a new house. But, when exactly should you do it? With the real estate market in constant flux, it can be a daunting challenge to seek the opportune time to buy a house so you get the most bang for your buck. Fortunately, there are established trends and time-tested criteria to help you make decisions. This guide to buying a house in 2022 answers the most common questions about when to buy. It will also highlight the key points to keep in mind when house hunting so you can acquire your new property at precisely the right time.
Related Link: Signs You’re Ready to Buy Your First House
Which month is the cheapest month to buy a house?
January takes this title quite easily and has trended as boasting the lowest prices for properties for some time. Why? Several reasons, most significantly that half the country sees inclement weather that hampers the inspection, upgrades and potential renovations, and moving process, not to mention the added stress of “window-shopping” properties in the snow. Also, there are far fewer houses on the market, with most homeowners uninterested in disrupting their holidays to show their property or move. After the December to January slope, however, the housing market will steadily rise through the spring and summer months before trending downward come fall. This is when people motivated to sell before the winter tend to start slashing their prices, but, unlike in January, there’s still significant inventory for potential buyers to consider.
Will house prices go down?
House prices will go down, but they’ll go back up, too, so understanding the market trends is key to getting your best deal. Summer months tend to be the more expensive months, with June and July taking the top prize for elevated median home sale prices. It’s not hard to understand why. With schools out, families relocating to other districts can travel to investigate the new potential housing options in person. With more customer buyer availability and property demand, sale prices flourish. The summer also offers sellers a few months of decent weather to prep or renovate the house for sale, allowing them to command higher sale prices thanks to those expensive or much-needed upgrades. But after those hot properties start getting snatched off the market – and others don’t – sellers still looking to offload properties begin feeling the crunch of the holidays and winter coming and begin slashing prices to get the home sold before the end of the year. Note: there can be tax advantages to selling the house before the new year, too.
Is this the worst time to buy a house?
The short answer is, no, it’s not. You can obtain mortgages year-round. It may be cold in parts of the country, and there may be snow on the ground, but houses have never been lower in the current market than they are this month. Inventory will be low compared to other months of the year, so you may find yourself having to make a list of must-haves vs. want-to-haves, but you can find fantastic options at highly reasonable rates for today’s market.
Is it better to buy a house at the beginning of the year or at the end of the year?
The answer to this question largely depends on what’s most important to you in the buying process. If you have little to no down payment saved and the price is your top consideration, then the beginning of the year is the best time to buy. January offers the lowest prices for making an offer. And, with the closing period and moving time, you’re almost at the start of spring when you take occupancy. However, if having choices is your biggest consideration, the best time to buy is actually around September. September offers the greatest drop-off from summer prices, has far more houses on the market, so there’s a much larger inventory to sift through to try and find your ideal home, and you’ve got plenty of time before winter to get closing handled and get moved in before the holidays begin. Based on an analysis of the real estate market in 2019, August into September offered the greatest price median home price drop while boasting the smallest drop in inventory, meaning it’s the cheapest time you’ll be able to find that many house options to choose from.
Related Link: A Guide for Avoiding First-Time Home Buyer Mistakes
What Month Do Most Houses Go on the Market?
June tends to have the most houses on the market at once, but they also boast some of the more expensive sales points for those homes. For a better deal, check out homes between March and April which offers the single largest inventory increase month-to-month for the year, and prices are significantly less than the average home being sold over the summer. There are many benefits to buying a home but you don’t have to break the bank to do so.
You know it’s time, but you’re not sure about your financing options? Learn more about Mares Mortgages today!
The Best Time to Buy Is Up to You
Following the trends gives you a better understanding of the market; however, it’s just as important – if not more so – to get your financials in order when buying a home. Credit history affects interest rates. The amount you save for a deposit determines your monthly payment and if you’ll need private mortgage insurance (PMI). Money and predictable finances are the key to successful loan approval and getting your offer accepted. The following are the key signs to look for when trying to figure out if you’re ready to buy a house:
The expenses that curtail the dream of homeownership tend to come from debt-related self-harm. Students loans, credit card debt and car loans significantly impact your financing options. Paying off your debt can open you to having the money you need to for your new home. Be sure to have a separate emergency fund, though, for unforeseen events.
Know your house payment and all the hidden fees.
Try to keep your housing payment to no more than 25% of your take-home pay. That includes principal, interest, property taxes, homeowner’s insurance. Keep in mind that if your down payment is lower than 20%, you’ll need private mortgage insurance. Also, if your home is part of a housing community, you could be looking at Homeowner Association fees,
Budget, Rates & Term
If you’ve saved up 10-20% of the down payment, you can eliminate the need for a PMI loan which will decrease your monthly expenses. You can also save future headaches by acquiring a lender with fix-rate conventional loans that won’t ever surprise you. And finally, be prepared for surprise expenses. Homeownership comes with its associated costs – new roofs, plumbing, renovations – that aren’t necessarily cheap. Make sure you can budget for the unexpected. Finally, if you can plan on staying in one place for a while, it’s a great time to buy. Short-term living tends not to fluctuate the housing values too swiftly. However, long-term investments can take advantage of inflation and natural market price increases that could help your property increase its value in as little as a year or two, more so in a decade. If you can buy and stay, you’ll have one heck of an investment on your hands!
The Loan Brothers Can Show You the Way
Mares Mortgage offers the opportunity to learn about financing, selling, and buying a home. They offer convenient online applications to determine loan rates and approval status home equity financing options and the chance to talk to customer service reps and learn more right away. Check out The Loan Brothers at Mares Mortgage to get the best advice and financial backing for buying a new home today!
Looking for more guides to buying a home? Check out Mares Mortgage, the #1 Mortgage Brokers in Orange County!