It’s been a demoralizing few years for home shoppers. Sky-high home prices and steep mortgage rates have put homeownership out of reach for many, turning the American dream of owning a home into a pipe dream.
Housing supply has also remained historically low, putting upward pressure on prices until inventory catches up to demand—a shift that likely won’t come until interest rates drop. Lower rates could reduce construction costs—spurring new builds—and coax more homeowners locked in with low-rate mortgages to sell.
But keep your eyes open: Fall tends to be prime time for snagging a better deal on a home—and the best day of the year to buy is just around the corner.
Best Day of the Year To Buy a Home
If you’re planning to buy a home soon after Thanksgiving, you might have an extra reason to be thankful. Attom, a leading data provider in real estate analytics, released its annual analysis highlighting optimal times to close on a home, with the last three months of the year leading the pack.
The company analyzed over 52 million single-family home and condo sales from 2013 to 2023 and determined that closing on a home on December 4 offers buyers the biggest savings. To ascertain this, Attom identified the lowest premium over its automated valuation model (AVM)—a tool that analyzes real estate data and price trends to assess estimated property values.
The fresh analysis reveals that home buyers who close on December 4 can expect to pay only a 4.8% premium (4.8% above market value) compared to the 14.6% premium buyers face if they close on May 27. Other home closing dates when buyers are likely to pay lower premiums are October 2 (5%), December 24 (5.1%), January 16 (5.1%), November 13 (5.3%) and October 9 (5.5%).
Best Months To Buy a Home
Buying a home in late summer or fall often means paying a smaller premium than during other times of the year. For instance, Attom’s decade-long data analysis reveals that a $225,000 median AVM home purchased in November typically sells for $241,500—a 7.3% premium.
Nationally, these five months offer the lowest premiums above market value, making them the best times to close on a home.
Top 5 States and Months To Score a Home-Buying Deal
According to Attom’s report, strategic timing could even let you snag a home below market value in certain states. Here’s a look at the top months and states where you can maximize your buying power:
Would-be Home Buyers Continue To Face Affordability Headwinds
Since September 2020, median resale home prices have soared by nearly 30%, and mortgage interest rates have surged by about 3% to 4%.
The housing market took off like a rocket during the Covid-19 pandemic as the proliferation of remote work allowed people to relocate more easily, sparking intense demand and driving up home prices. At the same time, mortgage rates in the early pandemic period were attractively low—ranging from the upper 2% to the upper 3%—which fueled a home-buying boom.
However, runaway inflation prompted the Federal Reserve to intervene with measures to cool both inflation and an overheated labor market. In March 2022, the Fed hiked its benchmark federal funds rate to an average range of highs not seen since the housing market boom that preceded the 2008 global financial crisis. Though the Fed doesn’t set mortgage rates, the federal funds rate has an indirect influence. Consequently, as the federal funds rate increased, so did mortgage rates.
As the Fed continued to maintain high rates, inflation dropped from a peak of 9.1% in June 2022 to a level gradually approaching the Fed’s 2% target. In response to improved economic conditions, the Fed implemented rate cuts in September and November 2024. While mortgage rates initially dipped—nearly reaching 6%—they quickly rebounded and are now approaching 7%, adding frustration for home shoppers already priced out of the market.
7 Tips To Cut Costs When Buying a Home
Whether or not you can nail down your closing date to an optimum time, there are measures you can take to keep home-buying costs down. Here are some strategies to consider:
- Save for a larger down payment. Making a large down payment lowers the amount you need to borrow on a mortgage. This can make qualifying for a better rate easier and, in turn, lower monthly payments. Putting at least 20% down on a conventional loan can also help you avoid private mortgage insurance (PMI).
- Bump up your credit score. Improving your credit before applying for a mortgage can help you qualify for a lower rate. There are several ways to do this, such as paying your bills on time, avoiding new credit accounts and paying down existing debt to reduce your credit utilization. Additionally, review your credit reports and dispute any errors with the appropriate credit bureaus to potentially boost your credit score.
- Go lender shopping. Don’t go with the first lender you find. Instead, shop around and consider your options with multiple mortgage lenders. This way, you can compare rates and fees to find a good deal more easily.
- Meet with several real estate agents. With the new National Association of Realtors (NAR) rules now in effect, a buyer who works with a real estate agent must enter a contract with that agent and might be responsible for paying their commission. Take the time to meet with several agents to determine who knows the local area best, who can provide the value and services you need and who can negotiate with listing agents to reduce your costs, such as getting the seller to pay your agent’s commission.
- Be flexible about location. If you can’t afford homes in a hot market, widen your area to nearby neighborhoods that may be less popular and more affordable but still desirable.
- Plan to buy in the fall. Historically, house-hunting demand tends to soften in the fall, so these months can be ideal for negotiating with sellers to score the best price.
- Determine your home-buying budget. Before looking at homes and falling in love with one that’s out of reach, determine how much you can reasonably afford to spend on homeownership.
More From Advisor
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- Down Payments Dip From Historic Highs: What This Means For Home Affordability
- Flying Solo: What Singles Considering Homeownership Need To Know
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
