Knowing the Best Time to Buy a Home
By Shelley O’Hara
- Factoring in economic conditions
- Gauging the housing market
- Timing your purchase for personal reasons
Now that you are prepared financially, you might consider what the best time is to buy a home. Ideally, the best time is when interest rates are low, when it’s a buyer’s market, and when the move fits your current situation, such as before the start of school, so your children are settled before starting a new school.
Unlike other goods and services that enable you to pinpoint a key buying time — buying cars at the end of the tax year, for instance, or buying linens in January — there really isn’t a perfect time of year, although there are factors that do affect the timing.
Interest rates, for instance, will affect your monthly payment as you saw in the section on costs associated with buying a home. When rates are low, you’ll pay less. When rates are high, your payment will be higher. Economic factors such as inflation, cost of living and market conditions, affect interest rates. In the past few years, rates have been at all-time lows.
Note that if you have a high-interest mortgage, you may be able to refinance to a lower rate. Likewise, if you have an adjustable-rate mortgage, you may convert to a fixed rate mortgage.
Buyer’s or seller’s market?
The type of market also affects pricing and availability of homes for sale. In a seller’s market, the demand for homes is high. Homes sell quickly and usually at the asking price or higher. Seller’s have the advantage in negotiating. In a buyer’s market, the market is slow: Houses may sit unsold, you may find more choices and you have the bargaining edge. Your real estate agent can tell you more about the current market. If you are buying a home for the first time and are able to buy during a buyer’s market, you are in luck. If you are buying and selling, you break even. Yes, you might get a great house for a great price, but you also sell your home in that same market.
Timing is everything
Your current situation also affects timing. You might not be able to pick a buying time if you are transferred to a new job, for instance. Buyers with children in school usually try to time the purchase around their children’s school schedule, but that’s not always possible. Seasons sometimes affect the market. For instance, you see a lot of houses on the market in the spring, when flowers are blooming and the weather is nice. Conversely, you may not find a lot of houses on sale during the holidays, because people don’t usually want to move during that time. As another possibility, you may have to sell your home first as a contingency on buying a new home.
In reality, you may face factors beyond your control that affect buying time but hopefully this has made finding a home much easier for you. Check out these Charlotte homes for sale and find an attractive Charlotte mortgage.
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