Next week might be the best time to buy a house this year

If you’ve been standing on the sidelines waiting to buy a house, listen up: The week of October 1-7 will likely be your best shot this year, according to a new analysis by Realtor.com. 

Homebuyers can, on average, save around $15,000 by buying during the first week of October compared to the peak week of the year, according to Realtor.com’s report, which analyzed data from 2018-2022 (minus 2020, due to pandemic anomalies). Meanwhile, demand during that time is 18.7% lower. 

Translation: You’ll have more options at better prices.

That’s the trend in a normal year. But what about this year, which has proven to be anything but normal?

Between rising home prices, decades-high mortgage rates, and historically low inventory, homebuyers have faced an especially challenging housing market in 2023. 

The average for a 30-year fixed-rate mortgage was 7.50% on September 26, the highest since 2000, according to Mortgage News Daily. And, the median monthly mortgage payment reached $2,661 for the four weeks ending September 17 — an all-time high, according to Redfin.

Yet Realtor.com expects that seasonal patterns may still be at play, at least in some parts of the country, making October 1-7 an ideal time to buy a home. 

Which all leads to one question: Will next week be the best time to buy a house this year?

Spring and summer are usually the busiest buying seasons since sellers want to maximize curb appeal (think lush gardens and flower boxes) and families with children try to move before the new school year starts. 

All that activity creates a sellers market: They can typically expect a 10% premium on their home’s sale price, thanks to the competition, according to an analysis by real estate data service ATTOM.

When October comes around, demand slows and prices decline — yet there’s still usually a solid amount of inventory left from the peak. As a result, a window of opportunity opens for homebuyers who aren’t tied to the calendar.

Realtor.com’s analysis doesn’t take into account highly variable factors like mortgage rates, which have been a big driver this year of movement in the housing market. 

A whopping 91.8% of homeowners have a mortgage rate lower than 6% and more than 62% have a sub-4% rate, according to Redfin. As a result, many homeowners are reluctant to swap their rate for one upwards of 7%. 

Despite the atypical housing market, there are signs that seasonal patterns are still holding true.

Realtor.com predicts housing inventory will climb during the first week in October to somewhere between where it was in 2021 and 2022 for the same period. The rate of growth in supply may not be on par with an ordinary year, but it’s expected to provide homebuyers with more options than they’ve had in recent months.

Competition is also expected to wane — and so far, Realtor.com sees activity aligning with pre-pandemic trends. However, that could change if inventory continues to be just as tight. Fewer homes on the market means more interest from people who have no choice but to move right now.

Prices have declined slightly so far in 2023, and if they follow seasonal trends, homebuyers should expect to have more purchase power in early October. Throughout most of 2023, prices have otherwise adhered to fairly typical patterns, which means homebuyers could expect a drop of 3.3% during the week of October 1-7.

High mortgage rates may prove to be the biggest barrier for homebuyers looking to take advantage of early October’s welcoming housing market. There are a few things you can do, however, to get a better mortgage rate right now.

• Shop around: You can save as much as $1,200 a year on your mortgage payments just by comparing quotes from at least four lenders, according to Freddie Mac. Most mortgage lenders let you answer a few questions online to start the process, making it easy to learn about your options.
• Consider different types of loans: Fifteen-year fixed-rate mortgages, adjustable rate mortgages, and government-backed mortgages all have different rates. The average for a 15-year fixed-rate mortgage was 6.81% on September 26, almost 0.70 percentage points lower than the rate for a 30-year fixed-rate mortgage. If you go that route, just be ready for larger monthly payments, since you’ll be chipping away at the loan over half as many years.
• Pay for discount points: Mortgage points generally cost about 1% of the total loan amount but can trim your mortgage rate anywhere from ⅛ to ½ a percentage point. If the seller is eager to unload their home, you might even be able to get them to pay for the points.
• Make a bigger down payment: If you can swing it, the more you pay now, the less you’ll pay over the life of the loan, since you’ll have a lower principal. What’s more, mortgage lenders may reward you with a lower rate, since they’re taking on less.

The first week in October is typically the best time to buy a house, thanks to solid inventory, decreased competition, and lower prices. Several factors this year, including historically low inventory and decades-high mortgage rates, may disrupt typical patterns. 

Nonetheless, experts believe some seasonal trends will hold true, especially in the most competitive markets. If you’ve been waiting for the right time to buy, it’s at least worth shopping around next week. You may find the home — and the deal — of your dreams. 

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at [email protected].