What if I told you I had a 10% off coupon for your dream home? You'd grab at the chance to save that much money, right? As the old saying goes, time is money, and your willingness to wait on your home purchase could save you major cash when it's time to buy.
The financial experts at NerdWallet have just released a study that examines the best time to buy a house. They analyzed the past two years' worth of home listings and home sales (from Realtor.com) in the top 50 most populated metropolitan areas in the U.S. to decipher if there's a noticeable difference in home prices based on the month or time of year.
Good to know: Listing prices (a.k.a. asking prices) are the cost that sellers and their agents attach to the home when it's offered up for sale. Sale prices (or offer prices) are what the home actually sells for to the buyer who makes it theirs—sale prices can be above or below listing prices, and are a more accurate reflection of a home's value and, in general, of the market value in a certain area.
What they found was that home sale prices—the amount real buyers actually pay—do fluctuate with the seasons:
Summer is Expensive, But There's Lots on the Market
Summer is the most expensive time to buy, with prices peaking in June and July. There's also the most inventory during that time, so if you're looking for a very specific type of house—a unicorn of a home—summer might be your best bet.
Fall Listing Prices Don't Change Much, But Sale Prices Do
If you're looking at listings in the Autumn months, you aren't likely to see any major change from summer costs—NerdWallet found less than a half a percent drop in listing prices.
But the promising thing, for buyers, is that sale prices do fall in the fall, suggesting that there are still deals to be had—fewer buyers are shopping then, so homes stay on the market longer and that makes sellers more willing to negotiate or settle. And the reduction in autumn sale prices could mean major money in your pocket as a buyer: "In the 50 metro areas, home sale prices dropped 2.96% on average—that's a drop of $8,300 on the median home—from summer (June through August) to fall (September through November)."
Winter is Your Best Bet for Finding a Deal
If you're deciding when to take the homeownership plunge, you might naturally let the school year or your apartment lease dictate when to buy, but that might not be the most informed gameplan. If you can hold tight until wintertime, it could pay off in real, American dollars: Home sale prices were 8.45% less on average in January and February than June through August. According to NerdWallet, "January had the cheapest sale prices in 29 of the 50 metro areas, and February had the cheapest prices in 19 areas."
Check Out the Data from NerdWallet:
Interested in learning more about your area specifically? (Some areas definitely fluctuate more than others.) Check out this interactive infographic:
Interested in more of the "why" behind these home buying trends? Visit NerdWallet to view the whole study.