For home buyers hoping to snag a deal, they may want to make a move now. Home prices in January usually decrease compared to the spring and summer buying season.
There’s plenty of research to back that up too. NerdWallet recently crunched two years of realtor.com® data that reflected the 50 largest U.S. metros. Researchers found that January and February were the top months for those looking to get a bargain. In those months, home sales prices were 8.45 percent lower on average than in June through August.
However, this year may be a little different. Buyer demand has remained high throughout the fall, and home prices did not take their usual dip this January, says Jonathan Smoke, realtor.com®’s chief economist. Still, he maintains right now is a favorable time to buy due to the ratio of inventory to sales (in other words, the number of homes for sale versus the amount of the competition). In 2016, he says, there were nearly double as many people buying in June than in January. Further, NerdWallet’s analysis found a 47 percent drop in January sales when compared with July over the past two years of data.
“You basically face almost half of the competition with almost the same amount of inventory in the market,” Smoke says. Buyers likely will face fewer homes with multiple bidders and may find they have more negotiating power with sellers.
Indeed, NerdWallet’s analysis found that in the previous two Januarys, the median home sold for $7,003 less than the listing price.
“As we look toward spring and later in 2017, [mortgage rates are] another reason to buy in January and February,” Smoke says. “Because rates are expected to be about 50 basis points, or half a percent, more as the year goes on.”
Source: “Why January Is the Best Time to Buy a Home,” NerdWallet