Last month, the Fed cut interest rates, which is a relief for prospective homeowners who have endured several years of rate hikes. However, since the Fed has indicated it will likely continue cutting rates this year and through the end of 2025, many buyers are left wondering when the best time to close on a house is.
According to Realtor.com’s latest findings, September 29th through October 5th is the best time to buy a house this year.
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Danielle Hale, chief economist at Realtor.com, explains that a considerable dip in market demand drives prices down and allows buyers more time to make such a monumental decision.
Given that home prices and uncertainty are among prospective buyers’ top stressors, this week may provide a helpful buffer.
When to expect lower demand and falling prices
Hale notes that market demand drops 30% at the end of September and the beginning of October, which can mean a significant price change.
“Our research points to this week being the best time to buy because we see buyer demand dip in the housing market, and that creates an opportunity for buyers who are flexible with their timelines and especially those who don’t need to sell like first-time home buyers,” she said.
“They can take advantage of the fact that we have lower market demand — 30% compared to the peak season — and that tends to usher in softer prices, which are expected to drop by about $14,000 compared to the peak season and longer time on market.”
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Buyers can also enjoy more time to mull over their options and less pressure to make an offer than peak spring season, which can be especially helpful to new homeowners or cautious buyers.
“Buyers will have more time to make decisions, which is a nice advantage for first-time buyers or those who aren’t as familiar with the process. It gives them more time to make what is, for many, the biggest decision in their purchasing life,” she explained.
A couple celebrates the purchase of a new house.
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Understanding housing market seasons
“The housing market has a lot of regular seasonal patterns,” she said. “So fall is this time where we see a lot of buyers pull back, and they’re not as active in the housing market, which creates softer market conditions that we see that lead to an opportunity for buyers who are flexible and can get into the housing market.”
Hale explains that sellers like to take advantage of the renewed interest in the housing market during the spring and summer, especially if they hope to sell one home and buy another immediately. Buyers enjoy a slower market during the fall, which works in their favor.
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“Spring is a time that is more advantageous for home sellers because they have a lot of buyers that are in the housing market early in spring, and sellers tend to come to the market a little bit later in spring,” she said. “So spring can be very competitive for home shoppers and is a little bit more challenging.”
“For those who are trying to buy and sell simultaneously, there’s a lot more activity that can make it easier to accomplish both goals in a short time frame. So fall is the best time to buy, especially for those focused only on buying and don’t have any selling to consider.”
She notes that the easing of interest rates is another sign that the housing market may start to favor buyers soon.
“The fact that we’re seeing mortgage rates ease over the last few weeks thanks to the Fed’s big rate cut is just icing on the cake,” she said. “It’s a nice bonus to improve affordability conditions as we head into this best time to buy.”
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