A Guide To The Best Time Of Year To Buy A House

 

For many people, buying a house is seen as a goal that is a sign of financial success and security. There are a lot of factors that can affect the housing market, and these can be affected by your personal preferences as well as external factors out of your control.

Some things that can affect the housing market include interest rates that fluctuate with the economy, desired location, and even the time of year. It is no secret that the housing market can see some drastic changes with the seasons, and a lot of home sales will happen during the warmer months.

Spring and summer help make a house look more appealing because of the brighter colors, flowers in bloom, and sun entering rooms that create a much more inviting atmosphere. 

There are a lot of things to consider when you are thinking about entering the housing market, and it is important to avoid giving in to the pressures placed on people to find their own perfect place.

Because of the way that the current economy is always changing, it is worth trying not to pressure yourself into buying a house. Remember that it isn’t always a sign of success, and buying a house doesn’t always fit everyone’s personal goals.

Buying a house can be just as drastic of a process to people who already have experience within the housing market, which is why this guide offers some useful tips that can help you learn more about the buying process.

Buying a home can be a daunting prospect for first-time buyers and even people buying second or third properties. There are many things to consider when first starting to think about owning property and the commitments that come along with it.

One consideration needs to be what is the best time of year to buy a house, as the time of year can change many factors, and being aware of these might help you on your journey to finding the right house for you.

Additionally, it is worth carefully considering how the location, type of house, and economy can have an impact on your mortgage negotiations and overall moving costs. It is worth considering all of these factors before making the big financial commitment of buying a house, as there is a lot of work that will need to be done when it comes to contract deals as well as costs.

Make sure that you have access to a large savings account as it is likely that you will be faced with hidden additional costs along the way when you are buying a house. 

Whether you are a first-time buyer wanting to work on your knowledge of the housing market, or if you have more experience and are simply looking to learn more about how the time of year can affect the housing market, this guide has been made to help you make the right decision.

There are a lot of variables to be aware of when you are considering buying a house, which is why this guide has been made to decide what factors you want to prioritize, and how you can focus on what matters most to you.

The world of housing can be a little intimidating, so it is worth working out whether you feel ready, and whether purchasing a house will enable you to work towards your long-term goals. 

Buying A House – The First Steps

A good place to start is to first identify how much you can realistically afford to spend; this can be calculated by looking at a few different areas of your financial income and expenses.

The first area you should be taking into consideration is your income and employment status. A lender will want to know that you can reasonably afford the payments on the property and along with this they will also want to get an idea of how stable your employment is, usually requesting the past two to three years of employment history.

So, make sure you have this information to hand, usually in the form of pay stubs or W-2s. Looking into your previous outgoings, such as reoccurring monthly payments like fuel expenses, household bills, insurances will help you create a budget for how much you can pay per month towards a property.

DTI

Another area you should consider looking into, and an area lenders will also be looking at, is Debt-To-Income (DTI) ratio. Your DTI will help a lender see how much of your monthly income goes towards paying off debts.

Usually, to be accepted you need a DTI ratio of 50% or less, this is calculated by dividing your monthly debt by your monthly income.

As an example, if your monthly debt was around $1000 per month and your gross monthly income was $5000 a month your DTI would be 20%, the requirements will differ with your lender and other factors.

Down Payment 

The next step would be figuring out how much money you can pay as a down payment on a property, this is a one-time large payment towards the purchase of your house and can range anywhere from 3 to 20% of the property’s price.

There are benefits to putting more money in your down payment, with less money to lend you will be paying less interest to the lender, and you can also bring down the amount of time it takes for you to pay off the mortgage.

While considering this, you will also need to make sure you have enough set aside for closing costs, which are fees accumulated by the lender and other third parties for setting up the loan of the property.

These can range between lenders but usually are around 3 – 6% of the property’s value. Some lenders allow these expenses to be rolled into your monthly mortgage payments or paid by seller concessions, so it is always worth asking and choosing which option would work best for you.

Credit

Your credit score is another area that lenders will be taking a look at in order to tell them how much of a financial risk you are to lend to. If you don’t know your credit score there are many easy-to-use free websites that will let you see your credit breakdown, most banks now offer this as part of their online services so do check with your provider.

A good or bad credit score can affect your options, the better the score the more likely it is that you will find a loan with lower interest rates.

Credit score checkers consider your payment history, any amount of money you owe, the length of your credit history, different types of credit you have used, and any new credit you have been looking to obtain.

There are many ways to improve your credit score, such as checking for any errors, updating any outdated credit information, the inclusion of accounts not belonging to you, etc.

These errors more often than not have a negative effect on your score, so it would be a good place to start by checking if there are any on your account.

Other ways include making sure your payments are on time and working alongside a credit counseling agency.

Mortgage Approval 

Your next step should then be getting preapproved for a mortgage, as this can help you and your property agent find properties that suit you and your budget.

To do this you will need to apply through your lender, answer some basic questions about things such as income, any assets you may have, and the kind of properties you would be interested in buying.

They will then take this information, along with a credit check, and create an approval, this will put you in good stead compared to rival buyers who do not have preapproval yet, and so you are not that far along in the process.

Find A Good Real-Estate Agent

Finding a good real estate agent for you will also be a step in the right direction, they are the middleman between you and your new home, they can arrange viewings, search for properties that best suit your needs and are usually free, being covered by commission from the seller of the property.

If you are a first-time buyer it is recommended that you go through a real estate agent, although doing it without one is possible, buying a house is a complicated ordeal, and having a person with knowledge in the area will help give you confidence and help you find the right property for you efficiently.

When Is The Best Time Of Year To Buy A House And Why?

The time of year you choose to buy will affect the number of properties on the market and also the price of properties, so keep this in mind when looking and thinking about buying a home.

These factors may change from place to place, so it’s always a good idea to seek out an expert in the area, that’s where your real estate agent comes in. While a lot of house sales typically happen around the summer months, each season has its own unique benefits and drawbacks that have an effect on the buying process.

Depending on what type of options you are looking for, there are different things to look out for with each buying season. These are some of the more desirable variants that people look for. 

Of course, there is some natural variation to these trends, and additional factors that come into play include the current state of the economy, local events, and the type of house you are looking for.

However, the majority of house sales tend to follow the pattern below, so it is worth using these trends to make your decision on when you should place an offer on a house. 

If You Are Looking For Choice

Because of the increased options available in the spring and summertime, this is widely recognized as the best time to buy or begin your search if you want more choices.

A lot of sellers will try to use the warmer weather and bright sun to make their homes look more attractive, and it is often beneficial because the market is much more active within this time period.

Flowers bloom, the days are getting longer, and the bright sun might even make the grass look greener. It is a great time to show houses on the market, and the new beginnings of spring or even warmer months of summer are definitely used to their advantage within the housing market. 

More sellers are likely to have open houses around this time of year, and it is no surprise that this can create an increase in home prices. With the increased activity within the housing market, it is more likely that you will face more competition and need to outbid others.

For this reason, it is recommended that you are prepared to enter bidding wars with other potential buyers who are also trying to find the right property for them. While the extent of this can vary depending on the location that you’re looking in, buying in the spring and summer will usually have higher housing costs on the whole in more popular or desirable living areas. 

If you are considering buying a house during the spring, it is worth moving fast and avoid hesitating about your options. This is because of the much higher demand that occurs around these months, and spring is definitely one of the busiest times for real estate agents.

That said, if you want to get a good deal, it might be worth waiting until the end of summer. This can allow you to save a little money, but it comes with the risk of losing a good place by waiting. 

If You Are Looking For Decreased Prices

Later in the year, a lot of the demand will have gone away. This has the advantage of decreasing the prices within the housing market, however, this means that there is less choice than there would have been during the spring and summer.

Try to shop in the fall or winter months if you are driven by lower prices and the prospect of having more negotiation leeway. It really depends on what your priorities are, but those who are more focused on getting a lower price should consider being ready to make offers around August or September time.

This can allow you to get a higher chance of catching winter sellers quickly. 

Sellers who choose to list their homes in the winter months are usually highly motivated to sell, which is why buyers have the advantage of being able to negotiate a better price.

January and February are considered the most cost-effective times to buy a house because it is widely recognized as the off-season for the housing market. That said, the prices and range of available properties can vary a great deal.

For this reason, it is worth carefully considering the area that you are looking to buy, and what external factors can influence your price range. These include school vacations, weather, and other local events specific to your desired area.

Sellers tend to avoid the winter months because they don’t want to end up moving during the holiday season. That is why a lot of people tend to get a little more desperate to close a deal around October time, and this can be a great opportunity for you to get a great place for a lower price than you might have paid during the summer.

If you don’t mind having fewer options, then it could be worth waiting until the end of the summer to put in an offer on a house.

Things To Consider

In addition to the time of year, there are a lot of other factors that can affect the housing market. That is why you should take careful consideration of the following factors, and think about how they can influence your buying decisions as well as price negotiations.

It can be surprising how much your own emotions and feelings can impact your budget, and additional factors include location and the condition of the housing market at a chosen time. 

Location

Make sure that you have taken the time to think about where you want to live for the foreseeable future, and whether you want to stay in the area that you currently live in, or have a more drastic change to scenery.

Depending on what you want to move for, and whether that is for work or other reasons, it is worth deciding on a desired area that would work for you and your family, partner, or anyone else that you want to live with.

Try to be realistic in these discussions about what you want to prioritize and what factors are important to you within a chosen location. This can be proximity to your church, the local school, or even your place of work.

Try to highlight what is important for a location, and what might make you want to live there. Some people love the city, while others want to slow down and be surrounded by nature. 

When you are considering your desired location, you should use this to decide on your price range. Investigate the average house prices in your areas to get a rough idea of what you should consider cheap, and what to classify as expensive.

There is a lot of natural variation within the housing market, which is why it is worth taking the time to consider your chosen area and whether the type of house you want to buy is in high demand. 

Of course, there is some degree of variation within local areas, and places that are lower in demand are likely to be cheaper on average. However, it is worth carefully thinking about where you want to live, and what type of house you would like.

This can help narrow down your options, and make the process a little less overwhelming. Buying an apartment can be a more affordable option in a lot of cases, and built-up areas often have an impressive range of high-quality homes within apartment complexes. 

House Market Conditions

We’ve covered how the seasons can affect the housing market, and that it is more likely that there will be cheaper properties available during the winter months. More choice, as well as demand, usually comes into light during the warmer months of spring and summer, which is where a lot more business occurs.

Depending on your desired location, and additional factors such as what type of house you want to buy, the housing market can be affected by your search as well as the economy. 

Mortgage rates are often affected by the economy, and how trustworthy banks believe you to be. This is determined by your credit score, and whether you are deemed as less of a risk.

Mortgages can then be negotiated to have lower interest rates as well as more flexible time frames. Another thing that can affect your mortgage rates is the economy and how well that is doing at a given time. It might be worth doing some research on how external factors outside of your control can influence mortgages, and use it to predict the best time to make an offer.

Mortgage rates can be affected by the government’s pre-determined interest rates. Try to speak with someone who is more knowledgeable about the economy and how it can affect the housing market as well as mortgage interest rates so that you have all the information that you need to make more substantial financial decisions. 

Are you ready?

Try to avoid making the moves towards buying a house for the first time until you feel ready.

While there is a lot of pressure to get out of the rental market because it is considered “dead money”, there is nothing wrong with waiting until you know what type of place you want to buy. Try to take your time, avoid what expectations may or may not be put on you, and avoid rushing into the process.

It can be especially intimidating to buy your first home, and it is definitely made easier by employment security and a high credit rating. Young adults might want to get their own place and enter the housing market so that they can get on the property ladder as soon as possible.

However, it is definitely worth waiting until you feel ready and confident in yourself to go through the process of buying a house.

For those who already have experience with buying a house, it is also worth considering if you are ready to make your next move. One of the main factors that you should consider is how long you have lived in your current property, and whether it makes financial sense to buy a new house.

For some people who are in a better position to buy a house and have a larger than average savings pot, you might be able to pay off your current mortgage before starting a new one. This can allow you to rent out your current home and earn a little more money on a regular basis.

However, this isn’t always achievable because of the savings that are needed to do this. That is why more people will negotiate with banks and their mortgage companies to discuss their options, and see what price range would be appropriate for a new house. 

It is worth taking the time to think about your long-term goals, and whether buying a house within your chosen location would help you achieve these. Try to consider staying in the area if your work is local.

Of course, if your goals involve traveling or off-grid living, then buying a house might not be the most logical move for you. It can even cause you to question what you want to work towards. Try to think about where you want to be in five years’ time, and compare that image of yourself to where you are currently.

This can help you to be realistic about your goals, aspirations, and career. Not to mention, it can help you to decide what kind of house, if any, you want to buy. 

Try to be realistic about your goals, and whether you can afford to enter the housing market.

Climbing the property ladder can be a little intimidating if you aren’t sure what kind of house you are looking for, which is why it helps to set a budget that you can stick to.

If you are in regular employment, you might want to carefully consider your payments and decide if you will be able to pay regular installments of mortgage repayments. Financial security is essential for buying any house. 

Final Thoughts

There are a lot of things to be mindful of when it comes to buying a house. From the time of year to the economy and your personal goals, it is worth taking the time to think about what is important to you and how you can use the time of year to your advantage.

If you want to have more options and don’t mind entering a bidding war for a great property, then you could consider putting in an offer during the spring or summer months.

This is when the majority of house sales take place because of the increased appeal that blooming flowers and bright sunlight can add to a place. It can make any house look more attractive and welcoming, which contributes to the increased demand for properties. 

That said, it is definitely worth noting that houses are usually cheaper in the winter. Owners and real estate agents are more motivated to make a sale during the colder months because there is less demand for the property during this period.

If you don’t mind having fewer options, then it could be worth placing an offer on a house during the off-season. The prices are often cheaper than they would have been during the summer or spring.

It is definitely worth keeping this in mind when you are considering making the moves to search for a house that works for you. 

Of course, there is a lot of natural variation within the housing market that changes with different areas. For those who are looking for a high-end city home, it will be in higher demand than somewhere more remote.

Some areas are more popular and desirable than others, which is why it is worth researching what kind of area you want to live in before deciding on your budget. Other things that can affect the price of your dream house are the economy which can affect mortgage interest rates, and what kind of house you want. 

Depending on your personal goals, there are a lot of different types of houses available to choose from. These include cabins, bungalows, apartments, and single-family homes.

However, buying a house isn’t something that appeals to everyone, which is why it’s worth carefully considering your long-term goals before making the big decision to buy a house.

Depending on your lifestyle, some people don’t want to be tied down by mortgages, which is why they might struggle under the pressure that is often placed on them to buy their own place. Try to focus on doing what is right for you, and avoid giving in to the expectations because mortgages can be hard to get out of if you change your mind. 

To summarize, the time of year can have a big impact on the housing market, which is why most people try to buy a house during the summer months.

There is a lot of variation within different locations, so it is important that you do your own specific research to decide what kind of budget you want to stick to based on the range of house prices in the area you want to live in.

The beauty of buying a house, or even starting the house buying journey is that you get to browse your options and figure out what would work best for you and your current situation.