November 4, 2020
4 MINUTE READ
If you’re in the market to buy a home, knowing the best time to buy a home is just as important as knowing what type of house you’re going to be, where you’re going to buy it, and also how you’re going to buy it. But why?
Why is it so important to understand the “when” of the home buying process? As with most financial transactions, timing can sometimes be everything — and this caveat is especially true when it comes to landing your dream home. Of course, there are a number of factors that can contribute to determining the best time to buy a home, including current interest rate levels, pricing levels, the time of year, and even your own personal financial situation.
There are some situations in which the time to buy a home is “right now” — for instance, perhaps your job has moved you across the country, or you are expecting a new baby and need more room for everyone to grow. But if you have the luxury of waiting for the “right” time to buy, you’ll likely end up saving a substantial amount of money.
As mentioned earlier, there are a number of different factors that come into play when you’re trying to decide when to buy your new home. However, here are a few rules of thumb to keep in mind when trying to decide if now is the time to pull the trigger.
Typically, some of the best deals on homes can be found when it’s cold outside — in other words, at the beginning and the end of the calendar year. In general, some of the best deals on homes can be found at the end of the year, especially in December. Often, people who list their homes during the holiday season are doing so because they have to sell and need to move fast — meaning they’re usually more willing to negotiate.
However, there are often great deals to be found in the early months of the year, as well. Research shows that average home prices in the United States are more than 8 percent lower in January and February than they are in July and August, the busiest time of the year for home sales. Most likely, this can also be contributed to the “have to sell” factor, too.
No surprise here, but a great time to buy a home can be when interest rates are low. Over the past few years, the Federal Reserve has been raising interest rates in an attempt to keep inflation down and the economy stable. Early this year, the interest rate for a 30-year fixed mortgage was around 4.5 to 5 percent, depending on the financial institution. However, just a couple of years earlier, a buyer could secure the same mortgage loan for less than 4 percent.
While this may not initially sound like a big difference, it can really add up when you’re talking about a mortgage loan. Buying when interest rates are down can save you a substantial amount of money over the life of your mortgage and can also translate to a lower monthly payment.
While outside conditions should always be considered when buying a home, your personal financial situation should also play an important role as a deciding factor. Simply put, the best time for you to buy a home could simply be when you’re cash-flush, when your credit score is in a good place, and you don’t have large amounts of other debt hanging over your head. For instance, maybe you just finished paying off your student loans, you just received a large bonus at work, or you just got married and now have two incomes to contribute toward a mortgage payment.
Whatever the situation may be, the more money that you have on hand, the better the time it can be for you to buy a new home.
Your real estate search doesn’t have to be dreadful. At Reali, we offer you a home buying process that you can trust. Find your perfect home at the best price, with the help of an experienced and local Reali agent. Contact us to learn more today.