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Despite rising interest rates, fall is the best season to buy for hopeful homebuyers when it comes to home prices, competition and inventory.
SANTA CLARA, Calif., Sept. 14, 2022 /PRNewswire/ -- As children return to school and the weather begins to cool, the off-season is offering up opportunities for hopeful homebuyers. Realtor.com analyzed the numbers in its fourth annual Best Time to Buy Report and found the best time to buy a home across the nation is the week of Sept. 25 to Oct. 1. This early-fall period will offer buyers a host of favorable factors, including more housing listings, less competition, and lower prices.
Those who buy during this week can expect:
"After several years of an overheated housing market, higher mortgage rates are helping usher in more regular seasonal trends, which have pros and cons for home shoppers," said Danielle Hale, chief economist, Realtor.com®. "If you're flexible on your timing and can budget for higher rates, early fall can be a great time to secure a home, with a number of factors aligning to make it the best time of the year both in terms of price and competition. This is especially true for first-time buyers and others who are not trying to sell a home at the same time as their purchase."
Since 2018, Realtor.com® has analyzed home prices, inventory, listing views, and time on market, indicators that tend to follow regular seasonal patterns, to determine the best time to buy. Historically, the early fall has provided an ideal mix of market conditions, including substantial inventory, waning competition, below-peak prices, and a slowing purchase pace.
The benefits of buying during the "best week" include:
Reduced prices: Historically, an average of 5.2% of homes have price reductions during this period. As the market begins to stabilize after a frenzied couple of years, more than 6% of homes may have reduced prices during the best week in 2022. Nationally, this could translate into roughly 48,000 homes available at a decreased cost.
More listings: Although active listing inventory isn't back to pre-pandemic levels, it has increased year over year and year to date. There could be 780,000 listings during the best week, 46% more than this year's average to date.
Less competition: Fierce home buying competition has softened as mortgage rates rise. Historically, demand (as measured by views per property on Realtor.com®) during the best week to buy has been 26.9% lower than its July peak and 8.5% lower than the average week of the year.
More time to decide: Homes will stay on the market longer, giving buyers some breathing room to make purchase decisions. During the best time to buy, a typical home is expected to remain on the market for two weeks more than during peak market pace in May and one week more than the average time spent on the market to date.
Methodology:Realtor.com analyzed six supply and demand metrics at a national and metropolitan level that follow seasonal patterns, using data for 2018-2021 period (2020 data was omitted due to anomalies caused by the pandemic). The metrics analyzed include: 1) listing prices, 2) inventory levels, 3) new "fresh" listings, 4) time on market, 5) homebuyer demand (realtor.com views per property) and 6) price reductions. Interest rates, which do not follow seasonal patterns, were not included. To account for 2022 market conditions, estimates reflect typical seasonal patterns layered on top of the most recent 2022 weekly data.
Each week of the year was scored from 0 to 100 based on the number of active listings. A given week scored highly if it had more listings compared to other weeks of the year. The other metrics were scored in the same way, such that each week had six different scores for active listings, new listings, listing prices, days on market, price reductions and views per property. (In the case of prices, lower prices score higher. Same with views per property).
Each week was then ranked by the average of those scores. The week with the highest composite score was considered the best time to buy. This week represents a balanced view of market conditions favorable for buyers.
About Realtor.com®Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
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SOURCE realtor.com