Why January Is the Best Time to Buy a Home

Why January Is the Best Time to Buy a Home

Don't rush to buy along with everyone else. Be patient, and you might get a better deal.

While winter homebuyers generally encounter a lower inventory, buyers have the advantage of less competition. Additionally, the studies showed that home prices in January are typically the lowest they'll be all year. And with a likely increase in mortgage rates on the way, there are several reasons why January is the best time to buy a home.

Prices are likely to only go higher

Home prices in January typically take a dip compared with the summer buying season. In reports found that in January and February, home sales prices were 8.45% lower on average than in June through August.

Home prices are likely to increase even more than you typically see in spring because of low levels of inventory.

Less competition

January is still a favorable time to buy due to the ratio of inventory to sales the number of homes on the market compared with the amount of competition.

You basically face almost half of the competition with almost the same amount of inventory in the market. This potentially means fewer homes with multiple bidders and more room for negotiating with sellers.

During non peak homebuying periods, there also tends to be a larger difference between listing prices and sale prices. This can mean hidden savings for buyers.

Mortgage rates expected to rise

After hitting historic lows, economists expect additional rate increases, which means higher monthly payments for future homeowners.

With mortgage rates likely the lowest they'll be all year and with lower prices and less competition January is an ideal time to make your bid.