When is the best time to buy a house? (2024)

Market conditions

Housing markets vary dramatically from region to region and even town to town. Real estate agent Derek Morgan of Unreal Estate says some factors that can impact real estate prices include supply and demand, interest rates, employment trends and economic stability.

For example, you may see significantly higher housing prices in an area with a limited supply of available homes or raw land for new builds, whereas prices can be lower in areas with plenty of homes on the market and new neighborhoods in the works.

You may also hear real estate agents or newscasters use expressions like "buyer’s market" or "seller’s market." These terms refer to which party in the transaction is likely to have the upper hand. The difference comes down to supply and demand, meaning the current inventory of homes for sale versus the number of buyers looking to purchase.

Either way, you should have a general idea of the market you’re about to face before you apply for a mortgage and start shopping for a home.

"Buyers need to consider the current inventory levels, price trends and the overall health of the local economy to make informed decisions," said Morgan.

» MORE: Homebuying checklist

Seasonal trends

Seasonal trends can also impact housing market conditions, but not necessarily in the same way from coast to coast. This is mainly because factors like weather can be so different from one area of the country to the next.

While northern states like Minnesota and Montana can see housing markets slow during winter months when the cold and snow keep people indoors, the same can't be said for housing markets in Florida or California.

Accordingly, seasonal trends can still come into play anywhere.

Economic factors

There are also economic factors that can indicate the best (and worst) times to buy a home in any given market. For example, the local job market can play a role in supply and demand, as well as whether an area is experiencing growth or decline.

Other economic factors to consider include the interest rates that mortgage companies offer and how they impact housing prices and the local inventory of homes. Historical data shows that housing prices tend to fall as central banks raise interest rates, presumably since interest charges directly impact monthly mortgage payments and thus, overall affordability.

For example, the Federal Reserve increased the federal funds rate (a rate that influences mortgage rates) from 0.77% in May of 2022 to 5.06% in May of 2023. Over that time, the median sales price of existing family homes dropped by 3.1% nationwide to $396,100.

Personal considerations

A range of personal considerations can also impact whether it's time to buy. Some of these factors are financial in nature, whereas others have to do with how willing you are to commit to a specific property and where it's located, as well as the many responsibilities that come with homeownership.

Personal factors to consider as you decide if now is the right time to buy include:

• Financial stability. Florida real estate agent Troy Robillard says having a steady income and a good amount of savings is a sign someone may be ready to buy. Specifically, Robillard recommends having a down payment of at least 20% in order to avoid paying for private mortgage insurance (PMI).
• Extra income. Beyond having enough income to make a down payment and keep up with monthly payments, Robillard explains you also have to be able to afford taxes, insurance and maintenance costs.
• Good credit. A good credit score will help you qualify for a lower interest rate on your mortgage, Robillard says. You will likely need a minimum credit score of at least 620 to be eligible for a conventional mortgage.

» MORE: How much house can I afford?

Timing the market vs. personal factors

You can't always buy a home at the optimal time. Maybe you need to move because you're starting a new job in another state, or perhaps your family is expanding and you desperately need more space. In any case, all you can do is try to make conditions as favorable as possible  for your situation while also being realistic about the trade-offs if you decide to buy now or later.

While finding the right balance between market conditions and personal circumstances may not be easy, Morgan says this balancing act is crucial.

"While it's important to consider market factors, such as pricing trends and inventory levels, buyers must also evaluate their own needs, preferences and long-term plans," he said, adding that a skilled real estate agent can help navigate this balance by providing market insights tailored to the buyer's situation.

Robillard added that you have to decide what is actually important to you as well, and that doing so can help you reach a decision.

"This includes the price of homes in the area, the number of homes for sale, the interest rates, and your personal financial situation," he said. "It is also important to consider your long-term goals for the home, such as whether you plan to stay in the area for a long time or if you plan to move in the near future."

Also, don't punish yourself if you are in a situation where you really need to move no matter what. For example, current mortgage rates could be high, but does that really matter if you're pregnant with twins and living in a one-bedroom apartment? Probably not.

Interest rates and local supply and demand may also not matter much if you have to move to a new area for a job, or if you’ve found your dream home and just can't pass it up. 

In situations where interest rates in particular seem like a roadblock, it can help to remember that you can always refinance your mortgage to get a better deal later on.

Bottom line

As with all major financial decisions, the best time to buy a house depends on your personal needs and goals. That said, broad market factors and considerations like the time of year and current mortgage rates can also help guide you in your decision.

The best thing you can do is stay informed about the market conditions in your area and be prepared to act when you find the home you love. In the meantime, get your financial ducks in a row by increasing your savings for a down payment, making an effort to increase your credit score and paying down other debts in order to lower your debt-to-income ratio (DTI).