Homebuying is a process, starting from initial questions and continuing through each signature and initial on the closing documents. The earliest steps are critical, especially when it comes to timing.
You’ve saved the money, figured out your budget, built up your credit score, and scanned real estate sites endlessly for months, trying to nail down the ins and outs of your dream home. You’re ready for the next step, and to plunge into homeownership.
Just one question remains: when is the best time to buy a house?
Factors to Consider
The best homebuying timing isn’t the same for everyone. It’s not one-size-fits-all, but there are considerations before starting the purchasing process.
Beyond your own financial ability, it’s also wise to consider other factors when deciding whether or not to buy a house. Three key things to look at are interest rates, seasonal availability, and personal preference.
One of the biggest markers of signaling when to buy a house is the going mortgage interest rate. Interest rates are determined by three main factors, according to TheMortgageReports.com: first, the strength of the U.S. economy (when the economy is strong, rates rise and vice versa); second, individual factors that determine whether where you land on the mortgage rate scale (high credit and a large down payment can lead to a lower rate); and third, the lending company (different lenders might offer different rates, which is why shopping around for mortgages is important).
If the mortgage interest rate is lower than usual—which is common in unprecedented times, like a global pandemic—it might be a good time to buy a house, as long as your income is steady and stable.
However, if rates are on the higher end, that doesn’t necessarily have to make or break your decision; refinancing can be a future option if rates drop after at least six months of homeownership. As long as you can afford to make your payments, buying a house can still be worth it at a higher rate, especially if it’s more affordable than renting. This can often be the case in the Roaring Fork Valley, where rental costs match and often exceed mortgage payments.
When is the best time of year to buy a house?
In the Roaring Fork Valley, another determining factor is how the local market ebbs and flows based on time of year. For example, there tends to be more inventory during the spring and summer seasons.
It’s wise to note that Colorado caters to a seller’s market: inventory is low, prices (can be) high, and the competition is steep.
So, while the benefit to spring and summer shopping is more houses to choose from and look at, there are also many other potential buyers doing the same thing. Homebuying in the winter is the opposite: less inventory, but also less competition—many buyers are waiting until there are more homes on the market to start shopping. This gives the buyer a little more negotiating power and can lead to a better price on a home.
While there’s no right or wrong answer—namely because the real estate market mostly dependent on where you live—personal preference can go a long way in deciding when the best time of year to buy might be.
Summer and early fall are often considered the best times to buy in terms of lifestyle choices. For example, many rental leases are up at the end of May or early June, accommodating student and academic schedules. Many buyers look for a natural entrance to homeownership, like the end of a long-term lease.
Summer is also great for families with kiddos; a mid-summer vacation move allows children to relocate without disrupting their school year or learning and can be an easier transition. Even something as simple as warm weather can be a factor. Pleasant moving (and driving) conditions can go a long way.
On the reverse, if you don’t have kids, don’t mind moving in colder weather, and can easily find a house with a great price, winter might be the best time of year to buy a house, for you.
When to Buy a House
In summary, the best time to buy a home is subjective. However, these are the three key factors to take into consideration:
- Low mortgage interest rates. Keep an eye out for the best deal, where you can.
- Seasonal availability. Be aware of trends in your area.
- Personal preference. Decide on deal-breakers for you and your family.
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