When is the best time to buy a house?

Maybe you’ve spent several years building your credit or saving for a down payment, and you’re finally ready to buy your dream home. But is it the right time? The housing market tends to peak in the summer and cool down in the winter — understanding the market trends helps ensure you get a good price.

What’s the best season to buy a house?

When it comes to homebuying, seasons matter, particularly in regions with rough weather. While extreme housing markets can disrupt the usual ebb and flow, there are some predictable pros and cons to buying a home at various times of the year.

No matter when you decide to buy, remember that the most important thing is finding the right home for you and your family. Still, it can help to know how seasonality affects the housing market.

Spring

When the weather warms up, so does the real estate market. Spring is typically considered a great time to buy: Inventory is often higher, and you can get a better feel for how active the neighborhood is.

The housing market is most competitive in the spring and summer, when there are higher prices and limited options.

You'll also benefit from buying in the spring if you're looking for a newly built home — this is when many builders release their new models. However, because there’s bound to be more activity in the market, you may find that prices are slightly higher and competition is a bit stiffer than during slower times of the year.

Summer

Summer is the peak season for buying a house. Curb appeal is at its highest, and you can get a better feel for a neighborhood by taking a walk around the block when neighbors are out and about.

If you have children, you also might prefer buying during this time so you can settle in before the start of the school year. Again, though, the high demand during the warmer months likely means higher prices and more competition.

Fall

The real estate market tends to slow down as the year starts coming to a close. This can be a good time to get in while competition isn’t so bad — sellers who've not been able to find a buyer are more likely to be flexible on price. Plus, with fewer real estate transactions happening in general, you'll also have a greater chance of negotiating with mortgage lenders for more favorable financing terms.

Winter

If the thought of moving in the winter sends shivers down your spine, you're not alone. While many Americans don’t think of winter as the best time to buy a house, there are some advantages to purchasing in the colder months.

When you check out homes in the winter, you'll get to see houses when they're not quite as dressed up as they tend to be in the spring and summer (which means a more realistic glimpse into your potential future). And because winter is the slowest time for real estate, you’re likely to have more bargaining power with sellers and lenders alike.

Current housing market

If you're looking to buy a home, it's helpful to stay up on the market conditions in your area. You may hear real estate agents or newscasters referring to seller’s and buyer’s markets — these terms refer to who’s likely to have the upper hand in a real estate transaction. The difference between a seller's and buyer's market comes down to supply and demand, or the current inventory of homes for sale versus the number of buyers looking to purchase.

If you’re ready to buy a home, consider the type of market you’re in. A buyer’s market usually means more options and better prices.

As of April 2022, we’re in the midst of a seller's market. It is possible to buy a home right now, but you'll want to be ready: Make sure your finances are solid, take the time to get preapproved and be prepared to offer at least the asking price. You may need to move quickly on properties that interest you and be willing to pay a bit more than the asking price.

Buyer's market vs. seller's market

A seller's market is when there are more people house hunting than there are homes for sale. In this type of market, prices are driven up by buyers competing for properties.

In a seller’s market, buyers regularly face "bidding wars," where multiple potential buyers make increasing offers to win the property. As a result, homes in seller’s markets often sell for well above the asking price and often above the appraised value. Investors and others are currently purchasing homes for cash sight unseen, making it harder for ordinary buyers.

A buyer’s market, on the other hand, is when there are more homes for sale than there are buyers looking to purchase. In this type of market, the lack of competition for homes may drive prices down and lead to concessions (like down payment assistance) to attract buyers. If you're purchasing in a buyer’s market, you'll likely have more negotiating power, and you may be able to get a property below the asking price.

Are you ready to buy a home?

If you're thinking about buying a house, there are a few things to consider first. Having a solid financial foundation is crucial. This can help you qualify for the loan, demonstrating you’re able to afford the monthly mortgage payments. You'll also want to consider your long-term plans. Some things to think about before buying a home:

1. Down payment: Make sure you have enough saved for a down payment. While many first-time homebuyers worry about their ability to put down 20%, you may be able to put down as little as 3% (or less), depending on the program and lender. The lower your down payment, the higher your monthly payment will be.
2. Debt-to-income ratio: Your debt-to-income ratio is the amount of your monthly debt payments divided by your gross monthly income. Most mortgage lenders prefer a DTI below 36%, with 28% or less dedicated to your mortgage.
3. Credit score: A higher credit score will help you qualify for a lower interest rate, saving you money in the long run. Most lenders prefer a credit score of 620 or higher for a conventional loan. If your score isn't quite there, take some time to improve your credit before applying for a mortgage.
4. Income: Lenders want to see that you have a steady income and, ideally, that you’ve been employed by the same company or within the same industry for a while. Presenting stable income builds confidence with your lender and helps you qualify for the most favorable loan terms.
5. Future plans: If you anticipate moving in the next couple of years, it might not be wise to purchase a home. It’s generally good to stay in a home for at least three to five years before selling. This allows time for your property to appreciate and for you to recoup your initial expenses.

Bottom line: Is now a good time to buy a house?

As with all major financial decisions, the best time to buy a house depends on your personal needs and goals. Broad market factors and considerations like the time of year will affect the homebuying process, however.

As of spring 2022, we're in a seller's market. Inventory is scarce, and competition is high. Many homes are selling above the listing price (and over the appraised value). If you want to buy right now, be prepared to move quickly and be flexible on your must-haves. Just make sure the price is fair — as a reviewer from Texas put it, “COVID has made the market a seller's market, however, buyers should not be taken advantage of because of such.”

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.