When Is the Best Time to Buy a House? (2023)

Home Buying

7 Min Read | Nov 14, 2022

When Is the Best Time to Buy a House? (1)

By Ramsey Solutions

(Video) Why RIGHT NOW Is The Best Time To Buy A House! (Don't Wait!)

When buying a house, wouldn’t it be awesome if you had the widest selection and the lowest prices to choose from—and everything was lined up perfectly for when you were ready to move?

That’s the dream. The problem is, it’s not easy to time when home prices will be low and the number of homes for sale (or inventory) will be high. Even if you could, you’d have to be in the right place in your ever-changing season of life and financial situation.

To help you feel confident about finding the best time to buy your house, we’ll walk you through typical housing market patterns and show you how to tell when you’re financially ready to buy a house. That way, you’ll be set up for success as you take on one of the biggest purchases of your life.

Ready? Let’s do this!

What Is the Best Month to Buy a House?

If we’re going “by the book,” the best month to buy a house is typically August or September—when home prices get lower and inventory is still high. But keep in mind, no one can predict real estate trends with 100% accuracy. So never let what month it is make or break your home-buying decision—only your financial situation can truly determine the right time for you.

(Video) Is now the WORST time to buy a house?

See how much house you can afford with our free mortgage calculator!

With that said, in 2021, the best time to buy a house was probably around September—when existing home prices had a pretty nice drop of $6,400 and inventory was only down 20,000 homes. October wasn’t too bad either with a small price jump of $600 and a drop in inventory of 30,000 homes. Compare that to buyers who waited until November—home prices went up $2,500 and inventory dropped by 120,000 homes!1

To see these trends for yourself, check out the chart below:

Month

Home Price (Median)

Inventory (Millions)

July

2021

$364,600

1.31

August

2021

$361,500

1.28

September 2021

$355,100

1.26

October 2021

$355,700

1.23

November 2021

$358,200

1.11

December 2021

$358,800

0.88

January 2022

$354,300

0.85

February 2022

$363,700

0.85

March 2022

$379,300

0.93

April 2022

$395,500

1.03

May 2022

$408,400

1.15

June 2022

$413,800

1.25

July 2022

$403,800

1.312

What Is the Cheapest Month to Buy a House?

Home prices are usually at their lowest in winter. In fact, according to the 12-month period in the table above, home prices were at their lowest in January 2022—at a median home price of $354,300. So if the best time to buy for you means getting the lowest price, be sure to slip on your warm woolen mittens.

Keep in mind, winter is usually hibernation time for real estate—fewer houses are for sale during the busy holiday season (not to mention some regions have the cold and snow to deal with). In 2021, the number of homes for sale saw its greatest drop from November to December—losing 230,000 homes from the market!

Super low inventory could make it harder to find a home that has all the features you want. But no worries—who really needs a jacuzzi in the master bathroom anyway?

What Month Do Most Houses Go on the Market?

Spring is when most houses go on the market. In 2022, the national number of homes for sale shot up an additional 120,000 from April to May—the fastest rate of growth all year. That number kept growing each month into the summer and reached 1.31 million home listings by July! So, if a jacuzzi and an outdoor firepit are a must for you, spring and summer are the times to shop.

On the downside, spring is also the busiest house-hunting season, so competition and prices will likely be at their highest. This year, home prices shot up $15,600 from February to March and reached their highest point of the year in June at $413,800. But if you can budget for it, it’s often worth shopping when there’s an abundance of homes on the market to choose from.

What time of year is cheapest to buy a house? Typically it’s winter because people aren’t usually looking to buy a house once cold weather and the holidays arrive. Less demand for homes will give you some bargaining power.

Is Now a Good Time to Buy a House?

Since most real estate data points and housing market predictions point toward home values continuing to increase over the next few years, it might be better for you to buy now rather than later. But it really depends on your financial situation (more on that later).

The good news is home prices aren’t shooting up as fast as they were in the past few years. And with housing inventory slowly on the rise and higher mortgage rates removing some buying competition, buyers with all their ducks in a row could benefit from buying a house in the current market.

But Really . . . The Best Time to Buy Depends on You

Sure, you can try timing your home purchase just right to find the widest selection or pay the lowest price. But really, the best time to buy is when your finances are in order.

Here are the biggest signs you’re ready to buy a house:

(Video) Is NOW a Good Time to BUY a HOME?

  • You have zero debt and a big fat emergency fund. The biggest expenses that get in the way of people saving for a home purchase are all debt-related: student loans, credit card debt and car loans.3 Dump the debt and free up your income so you can afford your home adventure!
  • Your house payment won’t be more than 25% of your take-home pay. This 25% limit includes principal, interest, property taxes, home insurance, private mortgage insurance (PMI) and homeowners association (HOA) fees.
  • You’ve saved up a big down payment. Taking out a mortgage with a super low or no down payment will have you paying so much extra in interest and fees and keep you in debt for decades. Sure, it’s not popular to slow down and save up a bigger down payment. But it’ll protect you from a lifetime of stress and money fights in the long run.
  • You know how to choose the right mortgage. The overall lowest total cost mortgage is a 15-year fixed-rate conventional loan. Beware of fancy (expensive) mortgage products like ARM, FHA, VA, USDA and even a 30-year loan. They’re designed to help people who really aren’t financially ready to buy a house get one anyway—and then pay through the nose for it over the next few decades in the form of extra interest and fees.
  • You can handle homeownership costs. Depending on the age of the home you buy, you could end up having to tackle several home maintenance projects in a year, costing hundreds to thousands of dollars. Sadly, there’s no more landlord to fix things for you. Also, moving into a bigger space usually means your utility bill will be bigger too—so make sure you can budget for these things.
  • You plan on staying put for a while. All the up-front costs and work you’d put into getting a house probably won’t be worth the small amount of value you’d gain by living in it for only a short amount of time. But if you love your city and plan to stay put for at least several years, buying a house is a great investment!

If each of those statements sounds like you—congrats!—now could be the best time for you to buy a house. Get the ball rolling by getting preapproved for the right mortgage.

Find Your Best Time to Buy a House With Help From an Agent

If you want expert advice on whether now is the best time for you to buy, work with an experienced real estate agent who knows your market like the back of their hand. For a quick and easy way to find RamseyTrusted agents in your area, try our free Endorsed Local Providers (ELP) program. We only recommend agents who share our mission to serve you with excellence.

Find an expert real estate agent in your area!

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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FAQs

How do you know when is the right time to buy a house? ›

While monitoring if home values are rising or falling are important metrics, the best time to buy a house is when you can afford it. Borrowers should explore their loan options and take advantage of low-interest loans if they have a good credit score and little debt. Attempting to time the market is not a good idea.

Will 2023 be a good time to buy a house? ›

Our other experts agree: The slowdown in home sales that beset the second half of 2022 will continue into 2023. Sharga believes the number of sales will continue to slow, likely hovering in the 4.5 million range, with new-home sales at around 600,000. Listings may no longer go at a lightning-fast pace, either.

Why you should wait until 2022 to buy a house? ›

During the 2008 financial crisis, investors needed to wait an additional two years for home prices to start recovering. And in 2022, they're only now starting to react to rising mortgage rates. History suggests that home prices will continue weakening through 2023 before rebounding in 2024.

What month is cheapest to buy a house? ›

Home prices are usually at their lowest in winter. In fact, according to the 12-month period in the table above, home prices were at their lowest in January 2022—at a median home price of $354,300.

Is 2022 good time to buy a house? ›

Despite the pessimism some consumers feel, 2022 could be a great year to buy a home. However, it's a good idea to act quickly while market conditions are still favorable. For instance, if you get your initial mortgage approval soon, you can lock in interest rates before they go any higher.

Are house prices beginning to drop? ›

Figures show that house prices are starting to fall. This decline is expected to continue in 2023. There are a number of reasons for this: Interest rates have increased from their record lows since the end of 2021, making mortgages more expensive and reducing demand in the housing market.

Will house prices be cheaper in 2023? ›

Zoopla says all the leading supply and demand indicators it measures 'continue to point to a rapid slowdown from very strong market conditions. We do not see any evidence of forced sales or the need for a large, double digit reset in UK house prices in 2023. We still expect house price falls of up to 5% in 2023.

Will home interest rates drop in 2023? ›

Nadia Evangelou, senior economist and director of forecasting at the National Association of Realtors (NAR), is forecasting that mortgage rates will drop below 6% in the spring and summer months of 2023. She cites easing inflation and smaller rate hikes by the Federal Reserve as the reasons the drop is likely.

Should I wait for a recession to buy a house? ›

Is Buying A Home During A Recession Worth It? In general, buying a home during a recession will get you a better deal. The number of foreclosures or owners who have to sell to stay afloat increases, typically leading to more homes available on the market and lower home prices.

Why you should wait till 2024 to buy a house? ›

Falling house prices mean the cost of a typical home will drop from five times average household disposable income to 4.2 times in 2024, Mr Thompson said. “That would be the lowest ratio since 2015, marking a particularly opportune moment to enter the market.”

Will it be cheaper to buy a house in 2022? ›

Real Estate Market in the Third Quarter of 2022

And since there's still strong buyer demand and a shortage of homes for sale, prices aren't going to plummet. They're softening a bit when it comes to growth—but they'll still be higher than they were at the start of this year.

Will 2024 be a good time to buy a house? ›

The forecast for the housing market is expected to get gloomier next year before rebounding to 2022 levels in 2024. Fannie Mae's Economic and Strategic Research (ESR) Group forecasts single-family home sales to post 5.67 million in 2022 before dropping to 4.42 million in 2023 and then climbing to 5.25 million in 2024.

How many months in advance should I buy a house? ›

At least 6-12 months before: Start saving up for a down payment (if you haven't already) so you can show a lender you have the means to purchase a home. Also, try to get a broad picture of your financial situation by checking your credit report and score.

How much should I save a month to buy a house? ›

How much can you afford to save? – Data from the Federal Reserve shows that the average American saves only 6% of his or her disposable income. Assuming he or she earns the median household income, 6% would be roughly $300 per month, enough to buy a $100,000 home by 35 if he or she started saving at 28.

What is the quickest time to buy a house? ›

A good rule of thumb is to expect the sale process to take 12 weeks from when you find the right home. But it varies depending on a number of factors. It could be as quick as six weeks and it could take up to three months. Let's take a look as what's involved in buying a home and how long each stage should take.

What is the prediction for house prices 2022? ›

Against this backdrop, estate agents Savills and Knight Frank expect house prices to drop by 10% and 5% respectively in 2023. Economic experts Capital Economics are forecasting that in quarter four house prices will be 8.5% lower than they were in Q4 2022.

Will house prices drop in january 2023? ›

A housing market cooldown is expected in 2023 but prices will remain higher than before the coronavirus pandemic started, experts have suggested.

Where are home prices dropping the fastest? ›

Home Prices Are Dropping Fastest in These 10 Cities
  • San Francisco (-4.3 percent)
  • Seattle (-3.9 percent)
  • San Diego (-2.8 percent)
  • Denver (-2.3 percent)
  • Los Angeles (-2.3 percent)
  • Phoenix (-2.1 percent)
  • Dallas (-1.9 percent)
  • Portland (-1.9 percent)
Nov 28, 2022

How much will house prices go up in the next 10 years? ›

Mainstream: Having risen by 24% since March 2020, average UK house prices to fall -10% in 2023, as Bank base rate is forecast to rise to 4.0% Growth to resume in 2024, totalling 18% from 2024-2027 as affordability pressures gradually ease (net +6% over 5 years)

Will prices of homes drop in 2024? ›

A new report from Moody's Analytics forecasts that — given increased borrowing costs, elevated inflation, and a softening labour market — home prices will see a peak-to-trough decline of about 10% by early 2024. However, the report also notes that there may be some reprieve on the horizon.

What is likely to happen to house prices? ›

Higher mortgage rates have made it more expensive to purchase a home, and the housing market has started to take a knock, with prices dipping in recent months. Further rate rises are expected in 2023, which could seriously dampen the housing market because it means mortgage repayments will increase.

What will house prices be like in 2025? ›

Chief economist for the National Association of Realtors Lawrence Yun believes we are likely to see total price growth across the country of between 15% – 25% over the next five years. This forecast is likely to manifest as a decline in the coming year, a plateau in 2024, and then a period of relatively robust growth.

How long will interest rates stay high? ›

However, many industry experts believe within 18 to 24 months rates will be back to a more 'palatable' level. Somewhere like 2.5% to 3.5% for example. We can't expect rates to reduce as low as what we have been seeing in recent years, which in the industry we refer to as 'covid low' rates.

What will mortgage rates be in 5 years? ›

Interest Rates Will Go Up

The average rate on a 5-year fixed mortgage is forecast to rise by 0.3% this year, rising further to 1.2% next year and 2.1% in 2024.

How long until interest rates go back down? ›

Where will interest rates be in 5 years? In October, Morningstar analyst Preston Caldwell said that the key US interest rate was likely to fall to 3% by the end of 2023, against a consensus forecast of 4%. Its prediction out to 2026 was for interest rates to decline to 1.75% and move lower after that.

Is it better to have cash or property in a recession? ›

In addition, during recessions, people with access to cash are in a better position to take advantage of investment opportunities that can significantly improve their finances long-term.

What is worse inflation or recession? ›

In a recession, unemployment tends to be high, wages low and people are not able to afford to buy even lower-priced items because they do not have the purchasing power. Those who say inflation is worse argue that inflation affects everyone, while a recession only affects some people (as they lose their jobs).

Why house prices are so high? ›

One of the main reasons home prices have increased over time, especially in recent years, is low interest rates. When interest rates decrease, the cost of financing a home goes down, and more aspiring homeowners are inclined to purchase property. This increase in demand almost always increases overall home prices.

Is it too late to buy a house at 40? ›

We tend to be a first-time homebuyer at a later age. But if you're 40 and not yet checking open houses don't worry, it's not too late to be a homeowner.

Is it cheaper to build or buy a house? ›

In general, buying an existing home is cheaper. According to the National Association of Home Builders and the U.S. Census Bureau the median cost to buy a house today is $410,600 which is $28,800 less than building one.

Is it better to buy or rent? ›

Renting provides much more flexibility. However, if you have returned to the office, either full-time or partially, and assume you'll remain in your current job for a few years, then buying might be wiser. A common rule of thumb is if you plan to stay in the home for five to seven years, then buying is a good option.

Is it better to build or buy a house? ›

As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.

Will 2025 Be a buyers market? ›

First-time homebuyers will probably continue struggling to buy a home for a few more years. It'll likely take until 2025 for first-time buyers to regain market share, a Zillow survey found. Those buyers represent just 27% of the market right now, according to the NAR.

What credit score is good for buying a house? ›

It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.

How long does it realistically take to buy a house? ›

It typically takes anywhere from four weeks at the low end to six months (or more) to shop for and close on a house. But it can be quicker if you make a strong offer right away in a fast-moving market or slower if you have a hard time finding just the right place or keep getting outbid.

Is it better to buy a house sooner or later? ›

If there is no shortage of homes for sale in the market where you're looking, waiting may save you some money. “It is likely that prices will level off or slightly decrease now that interest rates are rising,” Froelich says. But waiting can be a losing game in places where housing is severely limited.

What not to do after buying a house? ›

7 things not to do after closing on a house
  1. Don't do anything to compromise your credit score.
  2. Don't change jobs.
  3. Don't charge any big purchases.
  4. Don't forget to change the locks.
  5. Don't get carried away with renovations.
  6. Don't forget to tie up loose ends.
  7. Don't refinance (at least right away)
Aug 12, 2022

How much cash should you have to buy a house? ›

To buy a house, you typically need 3 percent of the home price for a down payment and 1.5 percent for closing costs. So based on the typical U.S. home which sold for $356,700 in the summer of 2021, you could move into your first home with just $16,000 cash.

How much should I save to buy a $300 K house? ›

Most lenders are looking for 20% down payments. That's $60,000 on a $300,000 home. With 20% down, you'll have a better chance of getting approved for a loan. And you'll earn a better mortgage rate.

How can I speed up buying a house? ›

Tips on speeding up your house purchase
  1. Find a 'contract ready' property to buy.
  2. Avoid being in a chain.
  3. Book your survey early.
  4. Set target dates for exchange and completion.
  5. Get your money ready for exchange.
Nov 12, 2020

Is 3 months enough time to buy a house? ›

On average, it takes about four to five months to buy a house. That range includes the two to three months it takes to find the right house. And another one to two months to go from contract to closing. Keep in mind, that's just a rough average.

Is 4 months enough time to buy a house? ›

On average, it takes 4 ½ months to shop for a home, plus an additional 30-45 days to close on a home once you are under contract. But of course, the timeline can vary widely based on factors like the time of year, your financing needs, the type of home you're looking for, and the inventory in your local market.

Will mortgage interest rates go down in 2023? ›

Bankrate's forecast for mortgage rates

Greg McBride, CFA, Bankrate chief financial analyst, expects 30-year mortgage rates to drop to 5.25 percent by the end of 2023. I think we could be surprised at how much mortgage rates pull back this year. “2023 is not going to be nearly as eventful as 2022,” McBride says.

Is 25 too early to buy a house? ›

There's no minimum age to buy a house. If you're ready and have a down payment, buying a house in your early 20s is a smart move. If you want to buy a home young, start planning now and get in touch to let us know what you need. We also have a completely free education course available for all first-time homebuyers.

What age is too early to buy a house? ›

A Legal And Practical Look At The Question. Share: In the United States, it is legal to buy a house without a co-signer at the age of majority, which is 18 years old in most states. Reaching the age of majority empowers individuals to sign legal agreements and complete real estate transactions.

How much will house prices rise in 5 years? ›

' Savills says it expects to see house price growth of 1% in 2024 and a larger rebound of 7% in 2026 if mortgage lenders cut rates over the next 12 months and the base rate declines from mid-2024 as inflation falls.

Should I lock in my interest rate? ›

Most borrowers are attracted to the certainty a fixed-rate home-loan product offers, especially those who are budget-conscious. In fact, it is advisable for first-home buyers to take on a fixed-rate loan to be able to organize their budgets easily and to stay on top of their repayments.

What time of year is cheapest to buy a house? ›

Winter is usually the cheapest time of year to purchase a home. Sellers are often motivated, which automatically translates into an advantage to you. Most people suspend their listings from around Thanksgiving to the New Year because they assume buyers are scarce.

Should I buy a house if I plan to move in 2 years? ›

In general, it's best to buy when you have your eye on the horizon and you're thinking long-term. Experts largely agree that you shouldn't own unless you plan on staying in the home for at least five years. That's because, thanks to their high start-up costs, houses don't usually make great short-term investments.

Is it better to rent or buy at age 55? ›

After plugging in assumptions on investment returns, maintenance costs, home appreciation and other factors, the retiree would come out ahead financially by renting for less than five years. If the retiree plans to stay longer, buying would be a better choice.

How old does the average person buy a house? ›

According to a 2021 report from the National Association of Realtors, the typical first-time home buyer was 33 years old.

How much should you save for a house? ›

If you're getting a mortgage, a smart way to buy a house is to save up at least 25% of its sale price in cash to cover a down payment, closing costs and moving fees. So, if you buy a home for $250,000, you might pay more than $60,000 to cover all of the different buying expenses.

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