Speak to any real estate agent and they will tell you that the best time to buy a house is now. Why? Because the prices are always about to go up. However, the truth is there are just so many factors to consider before making a decision. Things such as the time of the year, the region, the neighborhood, and even the house will determine the cost of buying.
Let’s take a look at the best time to buy and analyze the various elements that influence the timing factor.
Beginning of the Year
Real estate companies in Kansas City and other areas might agree that one of the best times to buy a home is the end and beginning of a year. Most of the houses on the market are from people who “need to sell” and are more willing to negotiate. It could be that the person has been transferred to a different state and has to sell or they are in dire need for cash and they cannot wait for spring. This “have to sell” over “want to sell” situation forces the price down by up to 8.4%.
When Interest Rates are Low
If you are considering buying your home on a mortgage, then it is best you get it when interest rates are low. A 1% difference in interest rates results in a difference that is like day and night in the total amount paid. Here is an example.
If you were to take a 30-year, $300,000 mortgage at the current interest rate (5%), your total interest over the course of the entire loan would be $223,813. However, if you had taken the same 30-year, $300,000 about two years ago when interest was at 4%, interest accrued would have been $172,486 saving you $50,000.
By and large, keep an eye on the interest rates and buy when they are low.
When Inventories are High
Applying the law of demand and supply, real estate companies encourage people to buy houses when the inventories are high. When there are plenty of homes on the market, sellers have to price their houses competitively so they can attract buyers.
The heaviest selling months are in summer where families put their houses on the market owing to heavy foot traffic. The months of May, followed by April and June, have the highest inventories and are excellent for buying.
When the Economy is Doing Well
Finally, consider buying a house when the country is on an uptrend. Not only will you be doing better, but there will be new construction, increasing the competition. This ample supply relaxes pressure on prices. Furthermore, seeing as more people are in a good position to buy houses, the stronger credit relieves the mortgage interest rates, making it a great time to buy.
While these are among the factors to consider when buying a house, you should buy one when it feels right for you. Assess your financial situation and then choose one of these times to get the best deal.