December is notoriously hectic. Between attending holiday parties, decorating your house, and juggling a busy workload as everyone hurries to close the books on the dwindling year, your life might feel like a mad scramble. Plus, you need to buy gifts for all your friends and family! In the midst of all this chaos, you might be tempted to restrict your holiday shopping to only what’s absolutely necessary – but if you’re in the market for a house, you may want to reconsider. Why are the holidays a good time to buy a house?
Why Are the Holidays a Good Time to Buy a House?
There is no clear consensus regarding the best time to buy a house, but oddly enough, the holiday season is rarely at the top of anyone’s nice list. You’re more likely to hear that spring or summer is best because the selection of available houses is larger or that it’s really all about the interest rates. While house hunting during the holidays often gets overlooked, there are actually several reasons why this is the perfect time of year to buy a new house or refinance your existing home.
1. Less Competition
When people compete, they drive up the demand. Prices rise, and wait times increase. There’s not much competition in the real estate market in the winter months. Many would-be sellers and aspiring homebuyers are waiting until after the holidays. While this means that there are fewer houses on the market, it also creates an opportunity for savvy buyers who spot a desirable property. With less competition from other buyers to drive up prices, you may be able to snag a great bargain. Consider this: According to ATTOM Data Solutions, June home sales bring seller premiums of more than 9 percent; in October and December, that number tumbles to just 3.3 percent. While results vary by locale, the holiday season clearly has the potential to be a buyer’s market.
2. Motivated Sellers
Few people are eager to add the hassle of selling a home to the chaos that is the holiday season. As Good Housekeeping explains, sellers who list during this season often do so out of necessity. Whether they’re caught in a time-sensitive situation because they’re relocating or desperate to unload a property that’s been sitting on the market for longer than they expected, sellers with active listings in the winter tend to be hungry for a sale. As a result, they’re often more willing to negotiate on the price or various perks, which can sweeten the deal for buyers.
3. See How Houses Fair in the Worst Weather
When you’re selling something, you try to present it at its best. When you’re buying, you want to see it at its worst. Evaluating a home at its worst can help you avoid major issues and may let you use minor problems to negotiate for a lower price. In many areas of the country, the winter season ushers in frigid temperatures as well as treacherous ice and snow. Although this can make going from open house to open house a bit tricky, it also offers you an opportunity to see how a property that you’re interested in holds up to harsh conditions (source).
4. Interest Rates Are Historically Lower
Your interest rate has a major impact on the total cost of your loan, so it’s no wonder that borrowers often become fixated on getting the best rate possible. Even a small increase in the interest rate can add thousands of dollars to the total cost of your home loan over its full term. Unfortunately for borrowers intent on snagging a low rate, interest rates fluctuate and even experts struggle to predict when interest rates will be low. However, interest rates are historically lower in the winter months. As FortuneBuilder points out, part of the reason for this is that there’s typically less financial business being conducted during this period. With less demand, it’s easier for qualified borrowers to find better interest rates and favorable terms. That makes it a great time to talk to a lender about getting a home loan or refinancing your existing mortgage.
Are the holidays a good time to buy a house or refinance? At PrimeLending of Denver, we think so, and we’re ready to help you achieve your housing goals this holiday season. Contact us today to explore the possibilities and get started.