The novel coronavirus has caused unprecedented economic convulsions, including disruption in the normal patterns of homebuying in America. A combination of uber-low mortgage interest rates and diminishing supply have forced average real estate prices to record highs in many markets, while changing work lives and a desire for more space are helping drive new and existing homeowners out of cities and into the suburbs and beyond.
But when a new normal does return to the real estate market, that normal can be expected to include some of the imperatives that have driven the U.S. homebuying market all along -- the school year perhaps at the top of the list.
While each market is different and in a state of flux to varying degrees, there's definitely some conventional wisdom the house hunter should take into consideration, whether you're looking at investment property to flip, for income, or a place to live. So let's take a look at the best months for buying a house.
Winter is the best time of year to find a buyer's market
"Winning isn't everything. It's the only thing." – Vince Lombardi and others
If your real estate investing is targeted toward winning a good deal, the best month to buy a house is December -- specifically December 4, 26, or 31.
That's from ATTOM Data Solutions, which says those three were the only days the entire year that offered discounts below estimated market value when looking at 2013 to 2018 data.
The data firm's analysis of more than 23 million sales of single-family homes and condos during that time period also found that a buyer who can find a seller willing to close on the day after Christmas can realize the biggest average discount below full market than any other single day of the year.
So while that might help make December perhaps the cheapest month to buy a house, the winter months in general are the most likely to yield a buyer's market. Meanwhile, the summer months yield the highest demand and the biggest chance you'll encounter a seller's market in your house hunting.
June is the worst market month for finding cheap real estate
Based on sale price alone and from the perspective of a buyer looking for a good deal in residential real estate, that makes December the winner. The worst marketmonth? June.
Says the ATTOM Data Solutions report: "Nationally, while December is considered the best month to buy overall, there is still about a 1.2% premium. However, you can expect to pay higher premiums if you plan on purchasing in the summer, with the month of June having the highest premium at 7.1%."
What market you're in also, of course, matters, as any real estate agent will tell you. The ATTOM Data Solutions report, for instance, says the states realizing the biggest discounts below full market value were the following:
- Ohio (-7.4% in January).
- Michigan (-7.2% in February).
- Delaware (-6.3% in February).
- Tennessee (-6.2% in January).
- New Jersey (-5.8% in December).
Weather or not, it's about more than the kiddos
ATTOM Data Solutions' data comes from millions of real estate sales that occurred before the pandemic. But the estimated market value of any house should continue to rise and fall relative to demand from prospective buyers and when they're interested in buying -- which still remains in the summer months.
The report says the highest numbers of home sales during that six-year period occurred in June, as school is letting out. So, from the list price perspective, this makes June the worst month, followed by August, as school is resuming.
And it's not just about the kiddos. Weather and the holidays also are factors, of course. People naturally are less interested in navigating the housing market -- including house hunting in person -- when winter winds blow, even after the relatively dormant period between Thanksgiving and the new year yields to the rest of the winter months.
There are other factors that make buying in the winter months attractive. Your lender might be able to close a home more quickly, simply because there are fewer mortgage applications to process, and your real estate agent and other professionals will have more time, and maybe more incentive, to get a deal done when times are slow.
The bottom line
Ultimately, the best time of year to buy a house is when you need one. But if price is the prime factor, December in particular could be your best bet for a price reduction in a market with competition from fewer prospective buyers, and perhaps a particularly motivated seller for the property you're interested in buying.