Autumn typically brings cooler weather and falling leaves. It’s also a great time of year if you’re in the market for a new home.
According to a report recently released by Realtor.com, the best time to buy a home this fall is in early October. Specifically, the week of Sept. 29 to Oct. 5 should offer the best combination of easing mortgage rates, rising inventory and decreased competition in most major markets as the spring and summer peak buying seasons fade away.
The listing site analyzed several housing metrics, including listing price, available inventory, new listings, percentage of price reductions, time on the market and homebuyer demand to pinpoint the best week to buy a home in 2024.
In addition to the usual opportunities presented to buyers during the off-peak season, there is an additional benefit this year. Mortgage rates, which averaged above 7% at one point, have been steadily declining for the past four months. They were averaging 6.20% as of Thursday, according to Freddie Mac, a government-sponsored enterprise that issues a weekly national average mortgage rate considered the industry’s benchmark.
Lower rates have led to an improvement in affordability, at least in terms of borrowing costs. For example, a homebuyer taking out a $300,000 mortgage at 7.22% would have a monthly payment of approximately $2,040. At 6.20%, the monthly payment would decrease to about $1,837, representing a savings of over $200 per month.
Mortgage rates are expected to continue this downward trend through the end of the year. The Federal Reserve is almost certain to reduce short-term interest rates this week, which will impact the U.S. economy in several ways. Although the effect of that rate cut won’t immediately push mortgage rates lower, it is expected to exert downward pressure over time and lead to further easing, ultimately lowering borrowing costs.
Why fall is the best time to buy a home
The most active buying seasons are the spring and summer months because most prospective buyers want to take advantage of the end of the school year to find a home (and move before the start of the new one).
The warm weather also makes it easier to go to open houses, and blooming spring gardens tend to enhance curb appeal. With more buyers in the market, there tends to be more competition and, consequently, higher home prices and faster sales.
Fall is when sales activity typically starts to slow. There are fewer buyers and, therefore, less competition for available homes. Historically, buyer demand is 29.5% lower during the first week of October than during the peak season and 14% lower than the average week.
There are other advantages for buyers who want to take advantage of a less active market, too. Among them are:
Slower pace of sales
Homes typically spend nearly 35% more days on the market in early October compared to the fastest pace during the peak seasons, according to Realtor.com. In June this year, for instance, homes sold in an average of 44 days. Buyers during the first week of October can expect homes to stay on the market for about two weeks longer than that.
The longer homes stay available for sale, the more time buyers have to view different properties, weigh their options, prepare a purchase offer that makes financial sense and find the right home.
More inventory
Over the past few years, one of the biggest challenges for buyers has been the lack of enough housing supply to meet demand. The shortage led to bidding wars and surging home prices during the pandemic. But the slowdown in buyer activity has led to a surge in the number of homes for sale, which bodes well for buyers now on the hunt.
Aside from the recent supply increase, inventory levels typically peak in October because demand falls off. Buyers can expect to find 14% more available listings compared to an average week in the market during the first week of October and 37% more compared to the start of the year.
More new listings of homes that haven’t previously been on the market also tend to pop up.
Lower home prices and more price cuts
Home prices also generally tick lower in the fall — again, because of decreased buyer demand. Nationally, prices are about 3% lower during the first week of October compared to the peak spring and summer buying seasons. Realtor.com estimates buyers could save around $14,000 compared to summer’s peak median home price of $445,000.
Fall sellers are also more flexible when it comes to pricing. Typically, nearly 6% of homes have a price cut in early October, which, based on current inventory estimates, could mean as many as 50,000 homes nationwide will see reduced prices.
However, buyers should be aware that market dynamics will determine the cost of the home. Those house-hunting in highly competitive markets may see prices remain stable or increase.
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