Waiting to buy a home until spring or summer seems like the obvious choice for most families. The weather is warmer, kids get to finish out the school year, and there’s (usually) an abundance of homes on the market to choose from. But what about that other crucial factor — affordability? If saving money falls high on your list of priorities, here’s why buying a home during winter might be right for you.
A 2016 study by NerdWallet that analyzed home sales prices in the 50 most populous U.S. metro areas found that homes are 8.45% cheaper (on average) in January and February compared to June through August. That can translate to thousands of dollars in savings. To give you an idea, consider this scenario: The median existing-home price in June 2017 was $263,800. Assuming the 8.45% discount that you could get by buying in winter, you could save $22,291. Keep in mind, the extent of your savings will vary depending on where you live, but consider the benefits of those potential savings. Higher down payment? Money for updates or repairs? Extra funds for your retirement account? Buying during winter could open up a lot more possibilities for you.
Part of the reason prices are lower in wintertime is due to the lack of competition. Buyers come out in droves during spring and summer, but the holidays, cooler weather, and tighter housing inventory are all factors that typically keep buyers at bay during winter. With less demand, it drives prices down, making it the ideal time for buyers who are looking for the best deal possible. Plus, with fewer people to compete with, there’s less pressure to outbid other buyers, which can make your home search quicker and easier.
On top of cheaper prices and sparse competition, sellers who list their homes in the winter are highly motivated to get them off the market. And since homes take longer to sell during winter, homeowners may be willing to accept lower than asking price. This gives you even more leverage to strike the right deal and save big.
Lower prices, less competition, and motivated sellers: Put all of that together, and you have a market that’s ripe for financially savvy homebuyers. If you’re thinking of buying a home soon, consider doing so this winter to maximize your savings.
(By the way ... if you purchase your home before the end of the year, you may be able to take advantage of tax breaks associated with homeownership. Talk to your tax advisor to see if buying before year’s end could help you save even more money.)