Buying a home is one of the biggest decisions and most major investments you’ll ever make. And as you begin your home buying process, you’ll want to make sure you’re getting the home you’ve always dreamed of at the absolute best price.
As with most things, timing can be everything.
Around the majority of the country, the home shopping season begins to ramp up in spring with May being the prime month when sellers and buyers are at full force. You’ll see the most new home listings in May with an average of 577,043 new homes on the market.
The spring and summer months have always been popular for the home shopping season because of the warmer weather, longer days, less busy schedules, and the summer break from school.
But as you join the throngs of other home buyers pounding the pavement come spring and summertime, going from one open house to another, you’ll want to pause and ask yourself when is it truly the best time to buy?
Buying a home in July can work to your advantage, but before you put down your down payment, here are five things to know when buying a home in July that will help ensure you get the best price possible.
1. Inventory Is High
Most sellers put their homes on the market during the spring and summer months. This situation can be ideal for buyers because they have more inventory of homes to choose from and will more likely find a home they love.
For instance, July comes in right behind May as the second best month for high home inventory. July sees on average 542,378 new listings unlike in December, when new listings dropped significantly to an average of 304,555 new listings.
Even though home prices in December and other winter months are lower by 8.4%, with less inventory, you may have difficulty finding a home that fits all your needs.
2. July is the Beginning of Crunch Time for Sellers
As summer begins to wind down, sellers become anxious to get their homes off the market before the school year kicks off again leading into the less lucrative home selling winter months.
Indeed, homes in the months of January and February stay on the market the longest with a median of 104 days compared to June when homes go quick with a median of only 67 days on the market.
But if you wait to buy until late July when sellers are more nervous, you’ll have more negotiating power and be able to lower the asking price more than if you buy in early spring and summer in May or June.
3. Late Summer is a Sweet Spot for Buyers
Late summer in July is a great time for buyers to close the deal. July offers an ideal combination for buyers — there will still be plenty of inventory and homes to choose from while at the same time less buyer competition than in the busy early spring.
For instance, June is the absolute worst month for buyers. The median price of homes in June is at the highest, listed at $307,571 with 24% of homes selling over asking price, compared to July, with the median home price at $259,000 with 22% of homes selling over asking price.
Buyer competition is intense during early months in May and June with homes spending only around 67 days on the market. This quick turnaround doesn’t leave buyers with a lot of time or leverage for price negotiations.
4. Know Your Local Market Trends
One of the best indicators to decide if July is the right month for you to buy, is to look at your local market.
Depending on where you live, the spring and summer months may not be the hot home shopping season.
For example, in colder climates with distinct seasons, buyers can usually get a better bargain in December and January when sellers are more desperate to get their homes off the market.
However, the same can’t be said for warm climates such as Austin, Texas where January is actually the worst time for buyers as homes typically sell 7.2% over the asking price.
5. Summer Spending
One of the most important indicators for when you should buy a home is when you’re financially able. If you have good credit, just got a raise, or finished paying off student loans, it could be a telltale sign that you’re financially ready to make a big purchase.
Also on your radar should be mortgage rates. Currently, rates are rising to 4.5% and even 5%. You’ll want to calculate mortgage rates into your home buying decision as interest can add up quickly.
Taking all these factors into account, summer can be a good time financially for you to buy. For instance, the summer months don’t see a lot of holidays where people traditionally spend a large chunk of change — the 4th of July doesn’t involve a whole lot of gift-giving.
Additionally, during the spring and summer months, you can use any tax rebates from April as an investment towards buying a home.
Knowing the best time to buy a home can be tricky. This is why partnering with an experienced buyer’s agent can be a lifesaver. They can help you properly purchase your home as well as negotiate for the best deal possible, especially when market conditions aren’t necessarily in your favor.