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For at least two years, the real estate market has been on a hot streak that has seen soaring prices and bidding wars. Many buyers have resorted to all-cash offers to beat the competition, not to mention paying well above asking price.
Recently, however, the market has begun to show signs of slowing. Amid fears of a recession and increasing interest rates, the volume of existing home sales declined 14.2 percent year-over-year between June 2021 and June 2022, according to the National Association of Realtors (NAR).
At the same time, the seasonality of real estate activity, which was upended by the pandemic, has begun returning to more traditional patterns. That means spring and summer may once again be the busiest time of year, while fall and winter could return to being slower months.
Median cost of buying a house in the U.S.
The cost of U.S. homes has been on a steady upward climb of late. In June 2022, the median existing-home sale price jumped 13.4 percent from one year previously, reaching a record-high $416,000, according to NAR. Here is a month-by-month look at median home prices for the past year.
| Source: National Association of Realtors data |
| June 2022 | $416,000 | up from $366,900 in 2021 |
| May 2022 | $408,400 | up from $355,000 in 2021 |
| April 2022 | $395,500 | up from $340,700 in 2021 |
| March 2022 | $379,300 | up from $326,300 in 2021 |
| February 2022 | $363,700 | up from $310,600 in 2021 |
| January 2022 | $354,300 | up from $303,600 in 2021 |
| December 2022 | $358,800 | up from $309,200 in 2020 |
| November | $358,200 | up from $310,800 in 2020 |
| October 2021 | $355,700 | up from $313,000 in 2020 |
| September 2021 | $355,100 | up from $311,500 in 2020 |
| August 2021 | $361,500 | up from $310,400 in 2020 |
| July 2021 | $364,600 | up from $305,600 in 2020 |
| June 2021 | $366,900 | up from $294,400 in 2020 |
Median real estate prices have been soaring for years — an incredible 124 consecutive months of year-over-year increases, per the NAR. This pushes many prospective buyers, and particularly first-time homebuyers, to the sidelines. Affordability is a significant concern, as are fears that the market may be due for a correction amid such steep price growth. Still, experts who rely on median sales data to help gauge the overall health of the market say the outlook remains strong.
Buying a house in winter
Traditionally, homebuyers get a better deal on purchase prices when colder weather kicks in. A 2021 report from ATTOM Data Solutions shows that buyers who closed in October paid the most minimal “above market premiums” on home purchases at just 2.9 percent. December represents the next best bargain, with premiums at 3.4 percent, followed by November and January, both at 3.9 percent. (By comparison, buyers who closed in May typically paid an 11.5 percent premium.)
Scoring a bargain during winter, however, is not necessarily a sure thing amid an overheated housing market. “During the past two years, it was not at all cheaper [here] to buy a house in the winter,” says Keri Rizzi, a Realtor with HomeSmart Homes and Estates in White Plains, New York. “But if the market continues to correct itself in coming months, it may once again become true that the best deals to be had are found in winter.”
The cost you’ll pay for movers is generally more affordable during winter as well. “Moving companies tend to charge less in the winter because demand decreases,” says Bill Gassett, a RE/MAX Realtor and owner of Massachusetts-based Maximum Real Estate Exposure. “The peak moving season is spring to summer, and the prices from moving companies throughout the country are reflective of that.”
Pros
- Less competition: In general, fewer buyers are looking for homes during the winter, which means there’s less competition to face. “Lower competition means higher power to negotiate,” says Dino DiNenna, a Realtor with Southern Lifestyle Properties in Hilton Head, South Carolina.
- Lower prices: Home sale prices are directly proportional to market competition, says DiNenna: “Competition is lower during winter, and so median sale prices are also low at that time of the year.”
- Increased agent assistance: Come winter, real estate agents are likely to be more available to guide you through the buying process than they would be during peak summer season. “As there are fewer buyers in the market during winter, Realtors enjoy a more flexible schedule,” DiNenna says. “This means you can expect better attention and improved one-on-one advising from your Realtor in winter.”
Cons
- Less inventory: Typically, there are fewer homes on the market during winter. “During snowy months, sellers may not want the hassle of moving,” says Rizzi. In addition, “parents may not want to change their kids’ schools during the school year, and sellers realize they won’t get top dollar for their homes and may wait until the higher-priced spring selling season.”
- Weather difficulties: Depending on where in the country you live, winter weather can make viewing homes far more challenging. Closings may even be postponed due to weather conditions, says Rizzi.
- Home inspections can be tricky: It can also be more difficult to inspect homes in cold weather. “You cannot determine a roof’s condition if the roof has snow on it,” DiNenna points out.
Buying a house in summer
It’s no secret that home prices tend to be higher in the peak summer season. Between April and August, homes sell above list price in greater numbers than any other time of year, according to Redfin data and Fit Small Business statistics.
Still, there are few tactics that can help you save money if you hope to buy during this most competitive time of year. If your timeline is flexible, consider waiting until the very end of summer to make an offer on a home. “The last two weeks of August are a great time to buy, because so many other buyers have quit their search for the summer and are taking vacations,” says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida. “Also, sellers get worried and fear that an offer might not be coming at all, so their motivation is increased at the end of August.”
Yet another option is to look for fixer-uppers that are priced to sell. “If you’re handy and feel like practicing your HGTV skills, then roll up your sleeves and look for homes in need of some updating,” says Rizzi.
Homes that are being sold by the owners, rather than through a real estate agent or broker, may also present a saving opportunity. “For sale by owner properties, especially those still sitting on the market for weeks or months, may be tired of the nonstop solicitations and ready to sell to a savvy buyer,” says Rizzi.
Pros
- More inventory: The increase in summertime listings means buyers have the luxury of choice. “With more homes available on the market, you’re likely to have a diverse array of options to choose from,” says DiNenna.
- Visibility: During warmer months, buyers are able to get a more complete look at prospective homes. “Summer affords buyers the best chance to see every inch of a property, to really get a feel for the overall look and layout of a home,” says Rizzi.
- Easier moving: School is out and the weather is generally more pleasant, making the process of moving more manageable than it might be in winter.
Cons
- Increased competition: You certainly won’t be alone when home shopping in summer — this is the peak time for the real estate industry, and the most fiercely competitive.
- Higher prices: With increased competition comes multiple bids and, ultimately, higher prices. “During summer, the bidding wars are intense and multiple offers are common,” says DiNenna. “As a result, the prices are higher at that time of the year.”
- Higher moving costs: Moving company prices are also impacted by supply and demand. And come summer, when demand increases, so do the prices you’ll pay a moving company. All that hard work in the heat might not be too pleasant either.
Other factors impacting housing costs
- Mortgage rates: As rates head upward, homebuying becomes more expensive. “When interest rates rise just one point, buyers lose about 10 percent of their buying power,” says Severance. “That preapproval for a $500,000 home a few months ago [may] now only allow the buyer to afford $450,000.”
- Lack of inventory: An under-supply of homes also causes prices to increase. For the past few years now, demand for homes has far outpaced supply — though there are signs the shortage is easing, which may bring a cooling of home prices.
- High inflation: Rising inflation has a tangible impact on the overall cost of living. Buyers that previously felt ready to spend some of their savings on a home may now prefer to keep it for the ever-increasing costs of day-to-day expenses.
- Recession fears: When consumers feel nervous about the economy, especially amid talk of a possible recession, they tend to back off of spending, or even stop altogether. “This has an immediate impact on housing costs — sometimes so immediate that it feels like the real estate market changed overnight,” says Severance.
FAQs
Generally speaking, summer is peak real estate season, when there’s the most inventory to choose from — but also the most competition, and the highest prices. If affordability is a concern, you’re likely to score a better deal during the winter months. But really, says San Francisco Bay Area Realtor Julie Upton, of Compass, the best time of year to buy a home is when you need one. “You should not try to time the market, as homebuying is a long-term trade, not short-term,” she says. “Minor fluctuations between seasons will be insignificant in three or more years, so if you see a home you love, it’s probably wise to submit an offer.”
The same rules apply for first-time buyers as everyone else: Those who are looking to save money may want to hunt for a home during the winter months. “Shopping during winter allows you to avoid the bidding wars that take place during the more competitive spring and summer season,” says Rizzi. Buyers will typically find lower home prices between October and February.
With increased competition pushing prices upward, spring and summer can be one of the most challenging and expensive times to purchase a home. A greater share of homes tend to sell above their list price during spring and summer.
The cost of moving varies based on a variety of factors, including where you live, the time of year you’re moving and home size/how many belongings will be moved. The typical cost to hire professional movers ranges between $890 and $2,450, with the national average being $1,669, according to data from HomeAdvisor.
FAQs
Buying A House In The Fall
Outside of winter, a fall purchase can be ideal for cash-strapped home buyers. Once summer ends, sellers get more motivated. They usually lower their prices and provide an opportunity to get a deal. As is the case with winter, there's also less inventory during the fall.
What time of year is cheapest to buy a house? ›
The window between late fall and early winter is the best time for buyers on a budget. Keep in mind, fewer homes are for sale in the cold winter months and around the busy holiday season, so the selection of for-sale homes will be limited.
What month of the year is the best time to buy a house? ›
Summer (best selection)
Summer provides California home shoppers with the highest selection of properties for sale. Specifically, the end of May and June typically see the most home sales.
Will 2023 be a good time to buy a house? ›
Homebuyer.com data analysis indicates that, for first-time home buyers, June 2023 is a good time to buy a house relative to later in the year. This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment.
Will 2024 be a good time to buy a house? ›
With mortgage rates declining faster than expected, home prices are likely to remain mostly flat throughout 2024. This will be good news for buyers who have been waiting on the sidelines for a good time to enter the market.
Which month are most houses sold? ›
Spring (March-May)
The spring months are often considered the best month to sell a house. In fact, across the country, the first two weeks of May are often the busiest and most lucrative time for sellers. The spring has warmer weather, longer days, and lush landscaping opportunities that boost curb appeal.
Do house prices go down in a recession? ›
Will house prices go down in a recession? While the cost of financing a home typically increases when interest rates are on the rise, home prices themselves may actually decline. “Usually, during a recession or periods of higher interest rates, demand slows and values of homes come down,” says Miller.
Is it ever too late to buy a house? ›
Thanks to the Equal Credit Opportunity Act, there is no age limit to taking out a mortgage. As long as you can meet the financial requirements, you're allowed to take out a loan at any time. To take out a mortgage over 60 you will need to be able to prove your ability to repay the loan.
Is December a good time to buy a house? ›
Buying a house in December? Be prepared for sellers to be in a more giving mood. It is the most wonderful time of the year, after all. It's a time when folks are more likely to make compromises or throw in some extras just to make the season extra merry and bright.
What day of the week is best to buy a house? ›
The best day of the week to close on a home purchase is Thursday, when sellers typically offer discounts around 3% of the list price, according to 2022 research from Zillow. Zillow prefaces that listing prices are only slightly higher Monday through Wednesday.
Buyers often purchase in the spring so they can move into their new home during the summer. House prices peak in the hot season, especially in June and July. By fall, prices usually drop and so does the number of listed homes. The market often freezes in December, partially because of the holidays.
Will 2023 be a good year to buy a house in California? ›
Although home prices are expected to improve in the second half of the year, the California median home price is projected to decrease by 5.6 percent to $776,600 in 2023, down from the median price of $822,300 recorded in 2022.
Will home interest rates go down in 2023? ›
“[W]ith the rate of inflation decelerating rates should gently decline over the course of 2023.” Fannie Mae. 30-year fixed rate mortgage will average 6.4% for Q2 2023, according to the May Housing Forecast. National Association of Realtors (NAR).
Will interest rates drop in 2023? ›
“We expect that 30-year mortgage rates will end 2023 at 5.2%,” the organization noted in its forecast commentary. It since has walked back its forecast slightly but still sees rates dipping below 6%, to 5.6%, by the end of the year.
Will mortgage rates go down in 2024? ›
Fannie Mae, Mortgage Bankers Association and National Association of Realtors expect mortgage rates to drop through the first quarter of 2024, by half a percentage point to about nine-tenths of a percentage point. Figures are the predicted quarterly average rates for the 30-year fixed-rate mortgage.
Will mortgage rates go down to 3 percent? ›
“Returning to mortgage rates of 3% or 4% is not going to happen, in my view,” says Yun, who points out that historically rates have been higher. The low rates of 2020 and 2021 were “unique” and those that got them were “lucky,” he says.
What age should I buy a house? ›
Key Takeaways. The best age to buy is when you can comfortably afford the payments, tackle any unexpected repairs, and live in the home long enough to cover the costs of buying and selling a home. Legally, you must be at least 18 in most states to buy a home.
What is the current interest rate? ›
Current mortgage and refinance interest rates
| Product | Interest Rate | APR |
|---|
| 30-Year Fixed Rate | 7.16% | 7.18% |
| 20-Year Fixed Rate | 7.15% | 7.18% |
| 15-Year Fixed Rate | 6.61% | 6.64% |
| 10-Year Fixed Rate | 6.64% | 6.67% |
5 more rowsOctober is the worst month to sell
Homebuying activity typically comes to a near-standstill in December, when people tend to travel and are busy with holiday celebrations.
How long do most houses stay on the market? ›
After your home is listed, your real estate agent can schedule showings and greet potential buyers when they visit the property. Although the average home sits on the market for about 22 days, it could take more time or less before you accept an offer. The days on market can also depend on when you list your home.
Thursday is the most popular day for agents to debut new listings, and homes listed on that day apparently sell fastest, according to Redfin, a real estate brokerage.
How long do recessions typically last? ›
Recessions can last from a few weeks to several years, depending on the cause and government response. Data from the National Bureau of Economic Research shows that between 1854 and 2022, the average recession lasted 17 months.
What happens if housing market crashes? ›
As prices become unsustainable and interest rates rise, purchasers withdraw. Borrowers are discouraged from taking out loans when interest rates rise. On the other side, house construction will be affected as well; costs will rise, and the market supply of housing will shrink as a result.
Is it better to have cash or property in a recession? ›
In addition, during recessions, people with access to cash are in a better position to take advantage of investment opportunities that can significantly improve their finances long-term.
At what age does a house start losing value? ›
If you haven't renovated your home in the past 30 years or so, it won't show well when you put it on the market. In other words, it won't get the same price as a similar home that's been maintained and updated.
Can a 65 year old get a 30 year mortgage? ›
There's no age limit for getting or refinancing a mortgage. Thanks to the Equal Credit Opportunity Act, seniors have the right to fair and equal treatment from mortgage lenders.
What is the oldest age to get a mortgage? ›
Summary: maximum age limits for mortgages
Many lenders impose an age cap at 65 - 70, but will allow the mortgage to continue into retirement if affordability is sufficient. Lender choices become more limited, but some will cap at age 75 and a handful up to 80 if eligibility criteria are met.
Will mortgage rates go down in winter? ›
Mortgage Rate Premia (BPS) by Month of Origination
Since home buying and refinancing is seasonal, there is less mortgage origination in winter months, so it could be that lenders must lower their rates to stay competitive and attract business.
Why is winter the best time to buy a house? ›
During the winter months, there are fewer real estate transactions than in spring and summer. Fewer transactions mean mortgage lenders have fewer loans to process, title and escrow companies have fewer closings to process, and home inspectors have fewer inspections.
Why is December the best month to buy a house? ›
You Might Get a Better Deal
Most sellers are more motivated to offload a home on the market during the winter months, when home sales traditionally slow down. So you'll be able to talk the seller down more than you would in May or June, when sellers can usually command higher prices for their real estate.
If you need to be occupying your home by a certain date to save on rent, it's a much better deal to close at the end of the previous month (for example, January 30) instead of the beginning of the current month (February 1).
Why is January the best month to buy a house? ›
Generally, home prices are lowest in January because demand is low, inventory is low and fewer buyers are looking for homes. While January might be the best month to get the lowest price on a home, you pick from a smaller selection of homes.
What is a down payment is 20% required? ›
Typically, mortgage lenders want you to put 20 percent down on a home purchase because it lowers their lending risk. It's also a rule that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this). But it's not a rule that you must put 20 percent down.
What is the hottest month for real estate? ›
Nationally, the best time to sell a house is March if you're trying to sell quickly, while the best time to maximize profit is July. Zillow recommends listing your home for sale in March, but no later than Labor Day, based on historical market trends.
Is it better to buy a house when interest rates are high? ›
Key Takeaways. Your interest rate becomes more important if you plan to live in your home for more than five years because you'll be paying it for a longer period of time. Buying a home at a lower price but at a higher interest rate can be workable if you can refinance the mortgage in the future to reduce your rate.
Why buying real estate in 2023 could be a good idea? ›
2023 is a balanced year for housing supply and demand. This is ideal for retail purchasers and rental property investors. No longer a “seller's” market. Rising interest rates raise the monthly mortgage payment, which reduces homebuyers and lowers property values.
What should you not do when staging a house? ›
20 Most Common Staging Mistakes
- Too Much Furniture.
- Furniture That Doesn't Fit the Room.
- Household Smells.
- Keeping Knick Knacks on Display.
- Excessive Dark Paint.
- Drastically Different Paint Colors Throughout the Home.
- Pushing All Furniture Against the Walls.
- A Lack of Light.
Homeownership Pros and Cons At A Glance
| Pros | Cons |
|---|
| Tax deductions | Upfront costs |
| Can help increase your credit score | Property taxes and other recurring fees |
| Privacy and control over own space | Responsible for the work and cost of home repairs |
| Feeling of accomplishment | Less flexibility to move |
1 more rowMay 22, 2023
Since the start of 2022, the Fed has hiked rates 10 times to combat rising inflation. As of May 2023, the federal funds rate ranges from 5.00% to 5.25%. If this prediction is correct, it won't be surprising to see some of the best high-yield savings accounts offering rates exceeding 4%.
What will mortgage interest rates be in 2023 2024? ›
Fannie Mae expects the 30-year fixed to ease to around 6.1% in the second quarter of 2023, before falling to 5.9% in the third quarter and 5.7% in Q4. And it gets even better than that. By the end of 2024, they expect the 30-year fixed to average 5.2%.
The Mortgage Bankers Association predicts rates will fall to 5.5 percent by the end of 2023 as the economy weakens. The group revised its forecast upward a bit — it previously expected rates to fall to 5.3 percent.
Will interest rates go down in December 2023? ›
After home financing costs nearly doubled in 2022, some relief is in sight for potential homebuyers in 2023. The interest rate for a 30-year fixed-rate mortgage in the U.S. is expected to drop to 5.25% by the end of this year, according to a forecast by the financial services website Bankrate.
How long will interest rates stay high? ›
'I believe by the end of 2023 we will see rates start to fall with a target of between 2.5 to 3 per cent in 2024. 'I believe if the base rate can get back to circa 2.5 per cent, then we will see rates hovering around that mark with a return to products that have not been seen in the mortgage industry for some time.'
What is the mortgage rate forecast for the next 5 years? ›
ING predicts rates to range from 5% in the second quarter of 2023, rising to 5.5% in the third quarter, and then falling back to 5% in the final quarter of the year. They also predict interest rates ranging between 3% and 4.25% in 2024, staying at 3% by the end of 2025.
Where will mortgage rates be at the end of 2024? ›
30-Year Mortgage Rate forecast for December 2024. Maximum interest rate 6.08%, minimum 5.57%. The average for the month 5.78%. The 30-Year Mortgage Rate forecast at the end of the month 5.90%.
How high will interest rates go in 2024? ›
Policymakers expect their interest-rate hikes to push the unemployment rate, now at 3.6%, to 4.5% in the last quarter of 2023, and to 4.6% in 2024.
Is 4 months enough time to buy a house? ›
It's nearly impossible to predict exactly how long it will take to find a home and get an offer accepted, especially when there are so many moving parts to the home buying process. It could take anywhere from 6 months to a year depending on the current real estate market and what kind of home you're looking for.
Is 2 months enough time to buy a house? ›
It typically takes anywhere from four weeks at the low end to six months (or more) to shop for and close on a house. But it can be quicker if you make a strong offer right away in a fast-moving market or slower if you have a hard time finding just the right place or keep getting outbid.
Is a recession a good time to buy a house? ›
During a traditional recession, the Fed will usually lower interest rates. This creates an incentive for people to spend money and stimulate the economy. It also typically leads to more affordable mortgage rates, which leads to more opportunity for homebuyers.
Is it better to buy a house at the end of the month? ›
Although there are a few complicating factors to consider, for most home buyers, closing later will save hundreds of dollars. The end of the month is the busiest time for closing for a reason – it may feel like a hassle to close at “rush hour,” but your budget will thank you.
The conveyancer will work in your interest to check the home and all the paperwork. The conveyancer will run requests for information, look at survey findings and coordinate dates for the exchange of contracts. This can be the longest part of the process of buying a home.
Does it make sense to buy a house for 5 years? ›
In general, it's best to buy when you have your eye on the horizon and you're thinking long-term. Experts largely agree that you shouldn't own unless you plan on staying in the home for at least five years. That's because, thanks to their high start-up costs, houses don't usually make great short-term investments.
What is a common disadvantage of buying a home? ›
Mortgage payments can be higher than rental payments. Property taxes will cost you extra — over and above the expense of your mortgage. Money needed up front to buy the home can be hard to pull together.
What age should you buy a house? ›
Key Takeaways. The best age to buy is when you can comfortably afford the payments, tackle any unexpected repairs, and live in the home long enough to cover the costs of buying and selling a home. Legally, you must be at least 18 in most states to buy a home.
What is the shortest time to buy a house? ›
You could say the home-buying process is as long as a piece of string – it could be anything from six weeks (exceptionally quick), to six months (not unusual) or even longer. But it can help you to understand which are the most time-consuming parts of the process, so that it doesn't drag on more than necessary.
How much did house prices drop in the recession 2008? ›
The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007. Prices fell by a record 9.5% in 2008, to $197,100, compared to $217,900 in 2007. In comparison, median home prices dipped a mere 1.6% between 2006 and 2007.
Will mortgage rates go down if we go into a recession? ›
Interest rates typically fall once the economy is in a recession, as the Fed attempts to spur growth. Refinancing debt and making more significant purchases are ways to take advantage of lower interest rates.
When you buy a house when is your first payment? ›
Since mortgages are paid in arrears and on the first of the month, your first mortgage payment typically comes at the start of the new month after you've lived in your new home for 30 days. This means that if you close on your house on May 25, your first payment is due July 1.
