Your home is probably the biggest purchase you will ever make. You will, therefore, consider a lot of different factors before deciding on the house to buy. One of the most important considerations is whether this is a good time to buy a house.
If you are undecided about making a purchase, read on for this guide on the best time to buy a house.
When You Can Afford It
The housing market is very volatile and gets affected by any changes in the business environment. It is almost impossible to predict whether house prices will go up or down. This is why the best time to buy a house is when you can afford to buy a house.
If you have enough savings for a down payment and little to no debt, then it is a good time to buy a house. You should also have a great credit rating (which gets you low-interest rates on a mortgage). One of the best home buyer tips is to make sure you have personals finances in order.
When Interest Rates Are Low
If the government reduces the federal reserve rate, mortgage rates also go low. If you can afford it, then this would be a great time to buy a house. To take advantage of the low mortgage rates, find one with a fixed rate so that you don’t get hit by increased rates if the federal reserve rate is lifted in the future.
When You Have a Good Credit Score
We all reach different levels on our credit scores based on our level of debt and the amount and regularity of our earnings. It is a great idea to buy a house when our credit score is high. That is typically when we are bound to get the best interest rates and mortgage deals.
Banks offer prime mortgages to people with the best credit ratings and subprime mortgages to those with bad credit histories. Subprime mortgages have the highest interest rates and are very expensive over time.
The difference in interest rates between prime and subprime mortgages is quite significant, which is why it may be best to wait until your credit rating is good before you buy a house.
During the Summer (If You’re Looking For the Best Options)
Many people put their houses up for sale during the summer. This is because we all prefer to shop when the weather is sunny and beautiful. Summer is the peak home-buying season, so you can expect to view the best available homes.
Unfortunately, there will also be a lot of competition for the best homes since there are so many more buyers. If you buy a home in the summer, prepare to go into a bidding war whereby there will be very few compromises from the seller.
To get the best offers at the best prices, many realtors recommend buying a home around August or September. At the end of summer and the beginning of the fall, there are still many houses on the market. But the sellers are more desperate to sell because they are running out of time.
Sellers know that once schools open and the winter months kick in, buyers go into hibernation. So it becomes harder to sell their home.
Shop During the Winter For Good Deals
If you don’t mind house hunting in cold weather, then you can get a very good deal if you buy a house in winter. This is because there will be less competition as very few other people will be shopping at this time. A buyer that lists their home during winter is probably desperate to sell since most buyers know they will get a better deal in the summer.
If you buy a home in the winter, you may be able to negotiate a lower price and discounts from the seller.
You Could Get the Cheapest Prices in January or February
House prices tend to be cheapest around January and February. These are winter months, and as mentioned earlier, this is the best time to shop for the best deal. However, this may not be the case in states that have a moderate climate and little fluctuation in weather from winter to summer.
You can do your research on house prices throughout the year to find out which months tend to have the lowest house prices. You can get this information from the US census bureau or any other publicly available data about house prices in your area.
Mondays are Popular to Close on a Sale
According to this real estate company, Mondays could be the best day to close on a sale. Based on their research, they found that those that closed-house deals on Mondays got an average discount of 2.3%.
This data was based on a study done in California in 2015, so it may be different for other states and for the present time. However, if you choose an experienced realtor, they may be able to advise you on the best day to sign a purchase agreement.
Is It a Good Time to Buy a House?
Predicting what will happen with house prices is very difficult. House prices have gone up or down based on market events that no one could have expected. This is why at the end of the day, the right time to buy a house is when you can afford it.
If you have enough money saved and a great credit rating, then shop for your preferred home at the end of summer. It’s also a good time to buy a house in the winter months. This is when you will get the best price.
Overall, be sure to have all of the proper documents and finances in place before purchasing a house.
For more tips on purchasing a home, read the rest of our blog.