{"id":8877,"date":"2018-06-28T14:17:41","date_gmt":"2018-06-28T21:17:41","guid":{"rendered":"http:\/\/canary.kcprod.info/blog\/?p=8877"},"modified":"2022-01-11T17:12:25","modified_gmt":"2022-01-12T01:12:25","slug":"best-time-to-buy-a-home","status":"publish","type":"post","link":"https:\/\/canary.kcprod.info/blog\/best-time-to-buy-a-home\/","title":{"rendered":"When is the Best Time to Buy a Home?"},"content":{"rendered":"

News headlines suggest that we\u2019re in the middle of a hot \u201chome buying season,\u201d referring to the time of year \u2014 usually spring and early summer<\/a> \u2014 when more people are on the hunt and prices respond accordingly. But there are other factors at play besides the time of year that are making people anxious to make real estate moves.<\/p>\n

First, the number of days that homes are spending on the market has recently hit a post-recession low, according to MarketWatch<\/a>. Meanwhile, Freddie Mac<\/a> reports that mortgage rates have recently climbed to their second highest level this year \u2014 this comes after the Federal Reserve voted to increase interest rates by 0.25% (and hints that more increases are on the horizon). And according to a recent Gallup poll<\/a>, 64% of Americans believe that home prices in their local area will continue to rise.<\/p>\n

If you\u2019ve been casually thinking about buying a home in the next few years, these trends might have you accelerating your plans \u2014 or maybe cancelling them altogether. But before you go down a real estate rabbit hole, it\u2019s important to understand how much these external factors really matter, and what you should consider instead as your home buying plans take shape.<\/p>\n

Don\u2019t Sweat the Seasonality<\/h3>\n

There\u2019s no doubt about it: home buying is seasonal. Looking at Wealthfront client data on number of new mortgages taken out each month, it\u2019s clear that June and late November\/early December see the most home buying activity.<\/p>\n

\"\"Source: Wealthfront Client Data, Home Originations from January 2001 – December 2017<\/em><\/p>\n

But it\u2019s hard to say exactly what causes the variation in activity \u2014 good weather, holidays, and even the school calendar can be factors. Housing supply-and-demand is based on so much more than just seasonality. Residential construction rates in your city can play a big role in the number of homes on the market, according to Redfin<\/a>, and so might be a better indicator of how competitive the buying market will be.<\/p>\n

At the end of the day, our perspective is that the best time of year to buy a home is whatever works best for your schedule and fits in with your overall financial goals. If you\u2019re interested in seeing what\u2019s realistic based on your finances and timeline to home ownership, you can use our Home Planning solution<\/a>.<\/p>\n

Real Estate Volatility is Hard to Avoid<\/h3>\n

We\u2019ve said it before and we\u2019ll say it again: timing the market is impossible<\/a>. But what most people don\u2019t realize is that this is absolutely true for the real estate market. Like the stock market, real estate volatility is hard to avoid, as evidenced by the Case-Shiller Home Price Indices<\/a>. Just as home prices will go up, you can also count on them to come down.<\/p>\n

\"\"Source: S&P Dow Jones Indices LLC, S&P\/Case-Shiller U.S. National Home Price Index retrieved from Federal Reserve Bank of St. Louis, 1987 – 2017.\u00a0 Note: Data normalized to 100 in 1987<\/em><\/p>\n

If you\u2019re looking at rising interest rates with raised eyebrows, focus on the big picture instead. \u201cThere are so many factors that affect interest rate activity, and it\u2019s impossible to predict what the future holds,\u201d says Wealthfront senior researcher Pedro Olea de Souza e Silva, PhD. \u201cRemember that with rising interest rates, it becomes more expensive for everyone<\/em> to buy a home. This may lead to less buyers, more inventory, and ultimately lower home prices over time \u2014 but again, it\u2019s difficult to predict.\u201d<\/p>\n

In the face of certain uncertainty, having a long-term time horizon and staying the course is your best path forward.<\/p>\n

Making Your Home Buying Goal a Reality<\/h3>\n

Since you can\u2019t control the real estate market, you should instead turn your attention towards what you can control: understanding how buying a home maps to your own goals and financial situation. (This is why we created our Home Planning Guide<\/a> and Home Planning solution<\/a>!)<\/p>\n

Whether you\u2019re hoping to buy next year or 5 years down the road, there are a few important things you should do to ensure that whenever you start looking \u2014 winter, spring, summer, or fall \u2014 you go into it with eyes wide open:<\/p>\n