What is the Best Time of Year to Buy a House in 2023?
2.14.2023 | Category: Homebuying
Homeownership is an important milestone for many people as it represents stability, independence and freedom. Owning a home offers you peace of mind knowing that you have a place to call your own while expanding your financial options for the future. However, buying a house requires a large sum of money, resulting in many homebuyers becoming hesitant to make a purchase.
The best way to make intelligent decisions when buying a home is to inspect the current state of the real estate market. By paying attention to current mortgage rates, buyer competition and housing supply, you can purchase real estate for less.
If you missed out on buying a home last year because of fierce competition and increasing prices, you might be hoping to get your chance at homeownership in 2023. Some experts predict a better outlook for the real estate market this time, so this could be the year you finally acquire your own place.
Proper timing remains the key to landing a more desirable price for your dream home. This blog answers an essential question for buyers who want to capture a good deal.
When is the best time to buy a house?
Below, we delve into the various options.
Is 2023 a Good Time to Buy a Home?
The previous year saw an unprecedented increase in mortgage interest rates due to rising inflation. As a result, home sales declined because many prospective buyers felt nervous about the alarming numbers. According to the National Association of Realtors, home sales were at their lowest over the last decade.
However, the house price index finally declined in the third quarter of 2022, as reported by the Federal Housing Finance Agency. The first noted decrease transpired in July 2022, which saw a 0.6 percent drop in the price index. This trend continued to the next month when a 0.7 percent reduction was observed in August 2022. It was the first time since March 2011 that the house price index has experienced two consecutive months of price decline.
What Does This Mean for Potential Homebuyers?
People will have more choices when buying a home since some cities will experience a slight price drop. While it's still a neutral market in many areas, 2023 is shifting towards the buyer's benefit. For example, fewer home shoppers are giving up on home inspections which were unheard of last year when the market was still tight.
Financial market volatility is expected to continue into the following year. However, many housing experts predict that mortgage rates will likely stabilize 5-6% across 2023.
The Best Time of Year to Buy a House
Generally, the best time to buy a house depends on each buyer's unique situation. Although, by delving into historical data, you can spot trends to determine when you should be in the market for a new home in 2023.
Here are some timing considerations you can make to maximize your homebuying journey:
Spring is a Hot Time for Real Estate
Spring is traditionally the busiest time of the year for real estate. Demand spikes due to a combination of favorable factors, such as warmer weather, the end of the school year and the arrival of tax refunds. However, this seasonality highly depends on where you are in the United States. The changes in pricing and the level of competition during Springtime are more noticeable in markets with harsher winters, such as Chicago and Minneapolis. More temperate locations like Tampa and Miami have barely discernible seasonal patterns.
Still, the market turmoil that transpired last year set the brakes on home buying no matter the season. But since the real estate market is forecasted to stabilize in 2023, we may see a return to the usual seasonal cycle.
With this said, real estate market fluctuations are likely to be localized. For example, smaller cities and suburbs known to be more affordable may attract many buyers who work from home, so the competition intensifies.
Overall, the most housing inventory is available in spring and is therefore considered the best time of year to buy a house–-if it is viable for you and your family.
What if you're not yet ready to buy a house this season? When is the best time to buy a home outside of spring? With the right realtor and mortgage lender, any season can be an excellent time to make your dream come true. Here are a few factors to keep in mind if you're jumping into homeownership:
- Summer: The start of summer is still a busy season. The market typically slows down by the end of August, increasing your chances of finding a fantastic deal. Don't discard listings with high DOM before you learn why they have not been sold all spring and summer (it could be something sensible such as a buyer backing out.)
- Fall: Get the most bang for your buck if you shop for a home in the autumn months. Many sellers will want to move out before the holidays or get a tax write-off before the year ends. They'd be willing to negotiate prices, allowing you to gain an affordable deal even when inventory is particularly low.
- Winter: It's the cheapest time of the year for homebuyers. You'll encounter sellers who want to close a deal as soon as possible. This translates to potential savings, more room for negotiations, and added perks. However, you'll have to contend with unfavorable weather during this time, a significant drawback for many homebuyers who plan on renovating.
Is it a Bad Time to Buy a House?
The answer would have been yes if this question had been asked in previous years. In 2021 and 2022, housing inventory was at its lowest, while the inflation in the financial market caused home prices and mortgage interest rates to skyrocket. All those factors made it an expensive time to buy a home, causing buyer sentiment to drop dramatically.
Thankfully, home buying conditions are starting to appear less daunting, and more buyers are already expressing a regained enthusiasm in finally buying their own place.
Quick Tips to Prepare for Your Home Buying Journey
Apart from knowing the best time of year to buy a house, ensure you are prepared when the opportunity presents itself. Be ready to make an offer and move in quickly once you find an ideal listing. Also, decide confidently on matters that affect your financial future through proper planning and preparation.
Here are three tips to help you lay the groundwork for buying a home at the perfect time:
- Watch out for trends related to interest rates, which continue to climb. Between April 3 and 9, the average rate on 30-year mortgages surged to 4.95% from 4.73% the previous week. This information can be helpful when shopping for mortgages and determining whether or not to jump into the market this spring.
- Get preapproved for a mortgage. Many real estate agents prefer you to be preapproved before looking at listings. If you're planning to shop for a house with intense buyer demand, you also increase your chances of being considered by the seller. Having a preapproval letter sends a strong message that you are a serious buyer.
- Partner with a mortgage lender with a proven track record. See that the mortgage firm offers the best home loan options, especially one that aligns with your budgeting objectives.
Choose Mutual of Omaha Mortgage for Your Homeownership Journey
Mutual of Omaha Mortgage is dedicated to serving your mortgage needs with the highest level of professionalism and respect. Since opening its doors in 1909, our goal has always been to maintain operational excellence at every level. Buying your dream home becomes much easier with our tailored solutions and expert guidance.
Our team is always available to provide preapproval services and a range of affordable home loans. In addition, clients can leverage state-of-the-art tools, such as our Mortgage Calculators, to get an estimated monthly payment cost of their home loan. This will allow you to budget your resources accordingly and know how much to save for the downpayment. Visit this mortgage calculator page to get an idea of the savings you can enjoy when you sign up with us.
We have an extensive portfolio of products to select from, and working with us means taking part in our charitable initiatives supporting veterans and service members. With Mutual of Omaha as your partner in the homebuying process, you won't have to search for a "mortgage lender near you."
We also have physical branches in many states, allowing you to meet one of our loan officers if you prefer to discuss your options and receive advice and answers to questions such as, "when is the best time to buy a house?" face-to-face.
Purchase a home today with a team who cares! Use our mortgage calculator to get an estimate of your monthly loan payment so you can feel financially confident when taking on a mortgage. You can request your personalized quote by calling or filling out our contact form.