Experts Discuss: Why Buying a Home in the Winter is a Smart Move
Winter really can be a great time to purchase a home.
Home prices tend to dip, sellers can be more motivated and the holiday spirit just makes people want to be in a home. The combination of fewer buyers and slow business also means lenders and real estate agents might compete a little harder for your business. Shopping for homes in the winter months also gives you a unique vantage point of a property.
With the season in full swing, we asked a handful of credit and homebuying experts to weigh in on winter homebuying.
Here’s what they had to say:
"Winter is a buyer’s market. With less competition and fewer dedicated house-hunters, the colder months present an opportunity to snag a good deal. Not only are asking prices typically lower, but you’ll face fewer buyers offering competing bids. Even a small difference in price can mean significant savings in the long run. For example, let’s say you’re buying a house with 6 percent closing cost and a 30-year mortgage with a 3.25 percent interest rate. If your house costs $500,000 as opposed to $550,000, the total cost of your mortgage will fall by over $80,000. You’ll feel the benefits of buying low for decades to come."
Anisha Sekar, Financial Advisor for NerdWallet
"Buying during the holidays may be a little stressful, but the payoff is more than worth it. The real estate market moves in cycles – up and down- both on a large scale (spanning decades, like the recent collapse and current climb) but also in relation to the time of year. Because real estate is a “supply and demand” industry, good deals can be found when no one else is looking. Therefore, some of the best deals happen during the coldest months of the winter, especially around the holidays. Furthermore, if you are looking to buy a bank foreclosure, many banks are eager to get the loans off their books before the close of the year, so even better deals can be found because of their increased motivation to sell."
Brandon Turner, Senior Editor of BiggerPockets
"Although the holiday season can be a hectic time to show and sell your house, there are distinct advantages to staging and showing your home at this time of year — you have a chance to show your home at its very best, adorned with warmth and cheer that’s sure to charm."
Timing is Key
"Timing is important because there are certain times of the year when you’ll pay more for a home and other times when it’s more advantageous to buy. Home sales tend to peak in the summer months (June and July) and prices usually peak just before then (May). Purchasing a home during the colder winter months will usually get you a better price – sales tend to slow down making sellers more willing to negotiate.
Although not yet in a complete recovery, signs are good for the housing market in general of late. Demand is improving and available inventory is as well."
Andrew Schrage, Founder of MoneyCrashers
"With the onset of the Dodd Frank legislation going into effect January 2014, as well as uncertainty regarding interest rates for 2014, it is a very opportunistic time for buyers to consider making a home purchase, rather than waiting for the spring market."
Michael Mahon, Executive Vice President/Broker at HER Realtors in Ohio
Source: Birk, Chris. "Experts Discuss: Why Buying a Home in the Winter is a Smart Move." Veterans United Network. 8 December 2018. https://www.veteransunited.com/futurehomeowners/experts-discuss-buying-home-winter/