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When is the best time to buy a house?

When is the best time to buy a house? (2023)

How to weigh the market against your financial situation

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Updated: 07/19/2023

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The decision to buy a home is one that shouldn't be taken lightly — and it's also one where it pays to get the timing right. For starters, it's always preferable to purchase a home in a buyer's market with less competition and more wiggle room for negotiations. There are also financial considerations to keep in mind, including how much of a down payment you can afford, how secure your employment is and your credit score.

But when is the best time of year to actually buy a home? And what should you keep in mind if you're deciding whether to buy right now or wait it out?

Key takeaways

There is no right or wrong time to purchase a home, but there are definitely times when market and economic conditions create a better buying environment.
You should consider local market conditions, economic factors, seasonal trends and your own personal financial situation before deciding to buy.
Personal milestones that indicate a good time to buy include having a generous down payment saved up, having a good credit score and being financially stable.

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.

Spring

When the weather warms up, real estate markets tend to follow suit. Spring is typically considered a great time to buy since inventory can be higher, and buyers can get a better feel for how active the neighborhood is.

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, real estate expert Michael Winkler of SellHomeToday.com says increased activity and higher demand in spring can also lead to higher prices that benefit sellers over buyers.

Summer

Summer is the peak season for buying a house. Curb appeal is often at its highest, and you can get a sense of a neighborhood by walking 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, high demand during the warmer months likely means higher prices and more competition.

Fall

Winkler said autumn months typically see a decrease in activity, and this can ultimately present opportunities for buyers due to reduced competition.

Plus, with fewer real estate transactions happening in general, you'll 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).

Winkler mentions that, in his experience, quieter winter months with fewer buyers offer the potential for better deals.

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?

Current conventional national mortgage and refinance rates

Rates are effective 10/04/2023 and are subject to change without notice. APR shown is provided by a partner of ConsumerAffairs.

Product	APR
	8.218%0.0%	Get Rates
The APR shown of 8.218% is available for a 30-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
	8.009%0.0%	Get Rates
The APR shown of 8.009% is available for a 20-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
	7.172%0.01%	Get Rates
The APR shown of 7.172% is available for a 15-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

	7.135%-0.02%	Get Rates
The APR shown of 7.135% is available for a 30-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
	8.122%0.06%	Get Rates
The APR shown of 8.123% is available for a 30-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

Current refinance rates

Product	APR
	7.593%0.39%	Get Rates
The APR shown of 7.593% is available for a 15-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
	7.15%0.27%	Get Rates
The APR shown of 7.150% is available for a 15-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

	7.891%0.0%	Get Rates
The APR shown of 7.891% is available for a 20-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
	8.699%0.02%	Get Rates
The initial APR shown of 8.699% is available for a 5-year adjustable rate mortgage in the amount of $200,000 for consumers with loan-to-value of at least 80%. APR may be subject to change per loan terms.

Rates are subject to change, Use is subject to Terms of Use

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Help me Decide

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.

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.

Derek Morgan, Unreal Estate

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.

FAQ

How far in advance should you start looking for a house?

Robillard explains that the amount of time you should spend looking for a house depends on your individual circumstances. If you are in a hurry to find a home, you may want to start right away and begin preparing for the move. If you are not in a hurry, you can start your search off slowly and keep an eye out for a new home anywhere from six to 12 months in advance.

"This will give you more time to research the market and find the perfect home for you," he said.

What month is the cheapest to buy a house?

The cheapest month to buy a house depends on local market conditions that vary around the country from year to year. Nobody really knows the cheapest month to purchase a home in any given market until after the fact, when a full year of data becomes available.

Should you buy a house in a recession?

Buying a home during a recession may seem risky, but it may not be, depending on your circumstances. For example, Robillard pointed out that individuals who are financially stable with secure employment may find good deals and plenty of opportunities to buy during economically challenging times when other people are worried about the future.

However, the opposite is also true. "If you are not financially stable or if you are not prepared for the potential risks, then it may be better to wait until the market recovers," said Robillard.

What credit score do you need to buy a house?

You'll usually need a minimum credit score of 620 to qualify for a conventional mortgage. However, some government-backed loans come with easier credit requirements, including a minimum credit score of 580 for FHA loans or even as low as 500 for FHA homebuyers with a down payment of at least 10%. VA home loans also come with no minimum credit score requirement.

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).

Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

International Monetary Fund, "House Prices Continue to Fall as Borrowing Costs Rise." Accessed July 9, 2023.
Federal Reserve Bank of St. Louis, "Federal Funds Effective Rate." Accessed July 9, 2023.
National Association of Realtors, "Existing-Home Sales Housing Snapshot." Accessed July 9, 2023.
Consumer Financial Protection Bureau, "What is private mortgage insurance?" Accessed July 9, 2023.
Consumer Financial Protection Bureau, "What is a debt-to-income ratio?" Accessed July 10, 2023.

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