Mortgages

Is There a Best Time to Buy a Home?

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Timing is critical when it comes to buying a home.

There are myriad sites, seminars and real estate sages out there offering the inside scoop on how to land the best deal. You could spend hours combing through articles and talking to experts. Or you could save yourself a lot of time and trouble and just look out the nearest window.

If the trees are barren and there’s snow on the ground, then it might be an ideal time to maximize your purchasing power.

Buying a home in the winter months may be one of the housing industry’s most downplayed opportunities. Sales are often slow and both prices and inventory tend to sag from November to January. There’s a potent mix of fewer buyers, more real estate agents and winter sellers perhaps more open to concessions.

To be sure, the best time to get a home loan is when it makes the most sense for you, both personally and financially. But if you have the benefit of a flexible timeline, a winter home search might help you land the best deal possible.

Winter Wonderland

Sellers and buyers alike tend to shift focus away from the housing market as the holiday season nears. Winter weather can easily make home shopping unappealing, and many homeowners simply think their property shows better in the spring and summer.

National home inventory usually falls about 15% in the winter compared to the summer months, according to the National Association of Realtors. At the same time, home prices dip an average of $7,000 after Labor Day and usually hit rock bottom in December.

Declining inventory is a seasonal risk for sure. The pool of available homes may shrink a bit, but consider the potential advantages. Sellers with a winter listing may be much more motivated to unload the property, possibly on more buyer-friendly terms than you’ll find in shirtsleeve weather.

A dip in homebuyers translates into more down time for real estate agents and mortgage professionals. These are folks you want competing for your business. You may even be able to move through the mortgage process faster than normal if time is a factor.

Does a winter purchase mean better loan terms? That’s tough to talk about in categorical terms, and the general response is probably an unsatisfactory, “Maybe.” So much depends on the individual borrower’s credit and financial profile, not to mention the overall mortgage rate environment.

What might be worth noting is that this winter, in particular, might be better for homebuyers than winter 2014, if only because interest rates are likely to rise by the end of next year.

A Different Light

Winter shopping also provides a unique vantage point of a property. You’ll see the house without the lush greenery or the sunlight streaming through open windows. You might also see whether the neighbor blows his snow onto your future driveway.

You’re battling sundown on a winter day, so a lot of viewings will happen on the weekends or spread over several afternoons. But you’ll get to see homes in a different light, if you will.

There’s no doubt that winter homebuying isn’t for everyone. Household budgets might be a bit tight given the annual holiday spending blitz. Families in particular might have a tough time moving in the middle of a school year.

But if the season suits you, the next four months or so might be the best time of the year to go looking for a home loan.

Image: iStock

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