Jessica Lautz, PhD
Jessica Lautz, PhD, is deputy chief economist and vice president of research at the National Association of Realtors. NAR.realtor/
Are you thinking, It will never be a good time to buy a house? Then perhaps you should consult your calendar.
Consumers considering the question, Is now a good time to buy a house? tend to focus on long-term home price trends, economic trends and the state of their personal finances—but there’s an additional factor worth weighing…the time of year.
Seasonal factors play a significant role in the prices homebuyers pay and the profits sellers pocket. A delay of just a few months can affect home prices by as little as a few percentage points to well over 10%, a difference that could easily amount to tens of thousands of dollars.
Bottom Line Personal asked real estate economist Jessica Lautz, PhD, what the data reveals about the seasonality of home buying and selling as well as one other important cyclical trend that affects real estate…
If you’re a buyer in search of bargains: Home prices tend to be the lowest in late fall and early winter. The savings can be significant—prices are 16% lower, on average, in December through February than at their annual peak in June. If a buyer can’t wait until winter, fall is his/her next best bet—prices in October and November average 5% below their annual peak. One big reason for this winter weakness in home prices is the school year—families with school-age children would rather relocate during summer vacation than uproot their children in the middle of the school year. Other factors: Harsh weather can make winter moves unpleasant across much of the country…and the December holidays are a distraction from home buying.
Not only do asking prices tend to decline in winter and fall, this is also when sellers are most likely to accept buyers’ offers that are significantly below asking price. A home that’s on the market in winter or fall likely is a home that’s been sitting on the market unsold for some time…or one that the seller is in a rush to sell. Sellers and their real estate agents are well aware that homes tend to fetch higher prices in spring and summer, so they generally won’t list them in fall and winter if waiting is an option. Either way, with buyers few and far between in fall and especially winter, these motivated sellers sometimes are willing to jump at any reasonable offer. Exceptions…
Homes that are likely to be used as seasonal second homes tend to be affected by the seasonality of their use rather than by the school year. Example: A condo near ski slopes might sell for a higher price as ski season approaches.
Newly constructed homes tend to be less vulnerable to seasonal real estate trends than existing homes. Construction companies face different schedules and pressures than individual home sellers.
If you’re a seller hoping to maximize sales price: Spring and early summer are when homes sell for the highest prices. June is the month when prices tend to reach their absolute highest point during the year, but that doesn’t mean sellers should wait until June to list their properties—the entire four-month stretch from April through July tends to bring strong home prices. And if a seller is ready to sell in late spring, it could be risky to wait until June and miss out on the first half of that annual home-sales window. Spring and early summer also are when homes tend to sell fastest—the median days on market is 33 days for homes listed in April through June, versus 49 for those listed in winter.
But there is good news for spring and summer buyers: These are the seasons when the most homes are listed for sale, so while prices are likely to be relatively high, buyers have more options to choose from than they would at other times of year—though they might face bidding wars for the most appealing properties. Nationwide, 16,530 existing homes sell each day April through June, based on the most recent data, versus only 11,380 per day in winter.
If you’re wondering how Federal Reserve rate cuts affect the real estate market: Seasonality isn’t the only cyclical trend that affects home prices—interest rate cycles can have a substantial effect, too. When mortgage rates fall, buyers are drawn into the market and home prices are pushed slightly upward. Reason: A buyer who obtains a lower mortgage rate can fit a higher home price into his budget.
But: Would-be buyers who are hoping that recent Fed rate cuts will lead to mortgage rates substantially lower than those currently available are likely to be disappointed. Lenders anticipated these rate cuts and have already largely priced them into their mortgage rates. The average rates on 30-year fixed mortgages peaked at 7.79% in October 2023, but they’d already fallen back down to 6.2% by the time the Fed began cutting rates this September. Mortgage rates might decrease a little more from here, but don’t expect anything dramatic. The National Association of Realtors expects that mortgage rates might inch down a little closer to 6% or perhaps even a bit below 6% in 2025, but not further. Any would-be buyers who have been holding off in hopes of lower mortgage rates should likely go ahead and make their move. Those who continue holding out for the mortgage rates of 2020–2021 when they were at about 3% are likely to be stuck on the sidelines for a very long time.
