By Megan Wild
The New Year has arrived, and if you’re looking for a house, you might be down to the wire. Should you go all in and purchase now or wait until the spring?
There are multiple things to consider before purchasing a house; location, square footage and style are just three of the many factors. Whether or not to buy a home during the winter or wait until the spring is something to consider, as well. Here are five reasons why it might be beneficial to buy before the flowers start to bloom.
You Face Less Competition in the Winter
Most Americans look for houses in the spring and buy in the summer. Approximately 50 percent of all homes are sold during the summer months. Why? Well, many people prefer to close on a home purchase and move when the children are out of school. That way, they’re established in the new house by the time the new school year starts. Many people also prefer to look when the weather is warmer and there is more daylight in the evening.
As a result, if you purchase in the winter, there will be less competition. Fewer buyers will be out there looking, so you’ll likely face less of a bidding war. Many people also want to close during the winter, as the spring market starts very early in the year.
Sellers Are Likely to Be Motivated
Because the majority of buyers purchase in the summer, sellers may be more motivated in the winter. This is especially true if they need to be out of the house due to a job relocation or other consideration with a specific time frame. A motivated seller is good news for a buyer. You can get them to sweeten the deal, either by coming down on the asking price or throwing in some goodies.
Does it look like the stove or refrigerator may need replacing soon, for example? You can ask the seller to purchase a new one as a condition of your purchase. The same goes for a number of other things you might have to upgrade or replace soon.
Interest Rates Are Likely to Rise Next Year
Interest rates, of course, have a large impact on your house payments. The higher the interest rate, the higher the payment will be. While the direction of interest rates is never certain, many observers think that interest rates will rise some time next year. The U.S. Federal Reserve, the government body that sets interest rates, meets several times per year. Not only that, but they meet multiple times a year and tend to hike interest rates in a strong economy to prevent inflation. They could raise interest rates several times next year. In other words, the sooner you buy, the lower the interest rate you can lock in is likely to be.
Housing Prices Are Climbing
In general, housing prices have been climbing steadily over the past several years in most areas of the country. That trend is expected to continue, fueled by the strong economy. If it does, housing prices are likely to be higher by the spring.
Each region and area varies, of course. It’s always wise to check the direction of housing prices in the location you want to buy in by contacting your real estate agent.
Inventory Shrinks in the Winter
Because fewer people look in the winter, many real estate agents and sellers act accordingly. They remove houses from the listing market in the winter, waiting for spring to come. There are approximately 10 percent fewer houses on the market in the winter.
You may have fewer housing options if you’re looking in the winter, but you can ask your real estate agent if they know of any homes that were on the market but withdrawn by sellers. If the sellers are planning on putting their homes on the market as spring approaches, you could be the early bird.
Should you purchase a home now or wait until it starts to get warmer outside? There are many things to think about. The decision depends on what is best for you and the home of your dreams. Happy hunting, in whatever year you choose!