When is the best time to buy a home? When is the best time to sell a home? These are age-old questions in real estate. Perhaps a better question is, “Is there a time that’s best for buying or selling?”
Because so many factors are at play, there’s really no definitive answer. Let’s talk about what those determining factors are, starting with mortgage rates.
Rates are constantly ebbing and flowing, so it’s important to be mindful of what they’re doing as you prepare to buy a home. There are all sorts of online mortgage calculators that can guide you through the process and won’t cost you anything to use. Simply search “free mortgage calculator” and once you find what you’re looking for, you’ll be able to plug in the approximate price range for the home you’re looking to purchase and get an idea of the current prevailing interest rates.
Though it’s rarely talked about, it’s important to keep in mind that the prevailing interest rate will influence your monthly mortgage payment more than the price of the home itself. Many buyers assume that rising home values will have a bigger impact on their payment, but they’re mistaken—interest rates are the true driving force behind what you pay. Even if home prices are increasing by $10,000 or $20,000, it’s far less consequential than the interest rate attached to your loan. That means if rates are hovering in the high 3% or low 4% range, it’s time to jump into the market.
Second, consider the fact that statistics only tell part of the story. What do I mean by that? When we’re trying to determine if it’s an optimal time in the market, we can use national, state, and county stats as a barometer, but we can’t forget that real estate is hyper-local. For that reason, we need to pay more attention to neighborhood- and area-specific data, and we should really limit our research to a particular region or metro area. Don’t base your understanding of what’s happening in the market on national media coverage.