Guide: Finding the Best Time of the Year to Buy a House
Buying a house is a huge undertaking and, for most people, one of the largest investments that they will ever make.
Finding the Best Time to Buy a House
Therefore, it is understandable that many people are wary about buying a house. After all, the process and timeline for buying a house will be drastically different from one person to the next.
In fact, most of us don’t know the first thing about how to buy a house for the first time, when is the best time of the year to buy a house, or even the best time to buy a house in our lifetime.
Investopedia suggests that if you are wondering when is the best time to buy a house, the answer is when you can afford it, and that attempting to try and time or foresee mortgage rates is almost impossible.
There are also some other tips for those wondering when is the best time to buy a house, some of which we will discuss in detail below.
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Before Buying a House
There are certainly some things you should ask yourself and steps you should take when deciding when is the best time to buy a house.
Property Taxes, Utility Costs, & HOA Fees
These can vary widely from property to property, so it’s important to nail down details for every house you are interested in.
First Home Purchase
If this is your first time buying a house, evaluate the likelihood that you will stay in this house for many years or if it will be a short-term starter home.
This is particularly important if you plan to resell the house and buy another house within the near future.
Hire an Inspector
Although it may seem like a waste of a few hundred dollars, hiring an inspector before you purchase a home may save you thousands of dollars later when buying a house for the first time.
Don’t Make Large Purchases Beforehand
Opening a new credit card or making a large purchase before you buy your house sends up red flags to banks that you may be an increased risk.
They don’t want to lend money to people they see as risky for purchases as large as a house, which may throw off your timeline for buying a house.
Ultimately, it is wiser to take your time and wait to make those purchases so you can take advantage of the best time to buy a house.
Research the Neighborhood
Base your offer on comparable properties in the neighborhood in which you are looking to buy.
You may also learn that your potential new home is popular destination for college students during Spring Break—researching ahead of time will allow you to gain the information that this may not be the best time of year to buy a house there.
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What about Mortgages and APR?
Unless you are a fortune teller, it’s very hard to predict what the mortgage rates are going to be when you buy a house, so trying to predict when is the best time to buy a house is probably a waste of time.
That being said, Bankrate does have a handy chart that can help you determine the difference between interest rates, APR—annual percentage rate—and total costs.
Bankrate’s mortgage calculator helps you see what your monthly rate would be should you chose to buy the house and whether this is the best time to buy a house for you.
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Is Now the Best Time to Buy a House? | Factors to Consider
What are your finances like currently? The best time to buy a house may be when you have enough money to put a significant down payment on the house—some lenders suggest around 20%.
This may help you to get lower interest rates on your loan and potentially lower your mortgage payments overall, which could prove that when you have the down payment is the best time to buy a house.
But can you afford the cost of a mortgage? Although this seems rather obvious, it is not always an easy answer when it comes to the best time to buy a house.
People try to predict the mortgage rates so that they can buy a house at the best time and end up making a profit based on the type of mortgage they take out.
It would be wise to have a good savings account set up before you spend your hard-earned money buying a house for the first time.
When is the Best Time to Buy a House?
What about your job? Are you in a stable industry and career? If you lose your job suddenly, you will not be able to afford a mortgage payment.
This will not only cause you to lose the house you just purchased, but it will also affect your credit score and your chances of purchasing another house.
Make sure that you have an adequate savings account before you even consider if this is the best time to buy a house in the event of an emergency.
Your credit score will also play a big part in whether this is the best time to buy a house for you. You are not going to be able to buy a house for the first time (or a car for that matter) with no credit or a credit of less than 620.
The best time to buy a house is when you have good credit, and the best time to work on your credit is now—building your credit is actually first in the list of how to buy a house for the first time.
The responsibility of owning a home—especially for the first time—is huge, and it’s a big commitment. If you are buying a house for the first time, be sure you are ready—both financially and mentally—for the commitment and work it takes.
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When Is the Best Time of the Year to Buy a House?
While many people might instinctively believe that spring is the best time of year to buy a house, the myth of spring being the best time of year to buy a house has roots in both practical reasons and misperceptions.
Spring is a time of change and what bigger change is there than buying a new house? It also fits nicely with most people’s schedules—especially when you are having to move kids into a new school or a new school district.
However, it is suggested that because fall and winter have less inventory—fewer homes to look at—those looking to buy a house during the winter months are the serious buyers.
These are the individuals who are seriously considering and planning their best time to buy a house.
Many people looking in springtime are “window shoppers,” while those buying a house in the fall or the winter are the serious buyers because they are buying a house at that time for a reason.
Realtor.com says that 50% of homes are sold in the summertime, but to get the best deal, your odds are better when the weather is colder and the days are shorter.
In fact, research shows that closings in January tend to show a dip in prices which suggests that people who made offers in November and December get the best deals—challenging the widely held belief that spring is the best time of the year to buy a house.
Timeline for Buying a House
Be sure and remember your particular market as well—winter destinations (i.e., Florida and Arizona) will see an upsurge during the fall and winter as the snowbirds and tourists go south—so the best time of the year to buy a house in one part of the country may not be the same in another area.
Another interesting point made is that for some purchasing condos or smaller living areas, the best time of the year to buy a house usually stay steady throughout the year.
This is due to the fact that people living there or those who want to live there are not needing to worry about having a specific timeline for buying a house.
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Tips For Those Buying a House For the First Time
If this is your first time buying a house, there’s no doubt that the process can be just as intimidating as it is exciting.
For first-time homebuyers, listed below are a few helpful tips that will help you navigate through the process of buying a house for the first time.
Check Your Credit
Paying your bills on time every month does not mean that your credit rate is automatically great.
In fact, the amount of credit that you are using relative to the amount of credit that is available to you can easily ruin your credit score, so the best time for buying a house may largely depend on your own credit score.
Know Your Monthly Cash Flow
Those buying a house for the first time should have a good idea of what is owed and what is coming in monthly.
If you’re buying a house for the first time, you should have some idea of how lenders will view your income, which requires becoming familiar with the basics of mortgage lending.
Researching how to buy a house for the first time will help you learn what you need to know to begin the process.
Stay Organized
If you are buying a house for the first time, you may become overwhelmed with the amount of paperwork and documents you will be expected to be familiar with.
You will typically be expected to show at least 2 recent pay stubs, W-2s from the previous 2 years, 2 months’ worth of bank statements. And that’s probably if you have good credit.
Many who are buying a house for the first time may be required to show even more documents, so staying organized is crucial–especially if it’s your first time buying a house.
Learn Your Down Payment & What You Can Afford
Chances are that you are going to have to work a lot and save a lot to get enough money for a down payment in order to buy a house—whether you are a buying a house for the first time or the fifteenth.
That being said, there are programs that can help house buyers who meet certain requirements such as incomes, locations, situations, and some particularly for those buying a house for the first time (i.e. VA, Federal Block Grant, etc.).
Do your research ahead of time to see what programs or loans may be out there that fit your needs when buying a house for the first time.
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Conclusion: Best Time to Buy a House
Use your brain and common sense—you don’t need to buy the biggest house on the block. You need to buy a house that you can afford and are ready for the responsibility for.
It’s important to do your own research when looking for the best time to buy a house, particularly if you are buying a house for the first time.
This is likely a decision that you will be stuck with for quite a while—good or bad—so make it an educated one.
Buying a house for the first time can be exhausting, painful, and exciting. People aren’t born knowing how to buy a house for the first time.
Don’t be afraid to ask questions and put a little elbow grease in finding out the best time to buy a house for your specific needs and wants.
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