Interest Rates Archives » Larry & Kathy Reichle

Mortgage Rates Hit Three Percent

March 6, 2021 by Kathy Reichle Leave a Comment

Since reaching a low point in January, mortgage rates have risen by more than 30 basis points, and the impact on purchase demand has been noticeable. While purchase activity remains high, it has cooled off over the last few weeks and is currently on par with early March, prior to the pandemic. However, the rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.

Current Mortgage Rates Data Since 1971 xls

Mortgage Interest Rates Break Records And Fall To The Lowest Levels Ever Recorded

September 15, 2020 by Kathy Reichle Leave a Comment

Interest rates have found a new low. This week, the 30-year fixed mortgage rate hit 2.86%, well below the 3% threshold that just a few months ago most people were saying would be the lowest they could reach. As we closed out August, interest rates had already come down to 2.91%, slightly above the previous record low of 2.88%, according to the weekly report from Freddie Mac. But now we have nudged even lower and momentum suggests they will see at least one more new lowest rate before we too much further into fall.

The decrease in rates has been met with an increase in applications, even though the Labor Day holiday usually puts a pause on housing activity. For the week ending Friday, September 4, both purchase and refinance applications increased 3%, but refinances continued to show their dominance by making up 63.1% of the total number of applications, according to the Mortgage Bankers Association.

(Even though Labor Day was Monday, September 7, after the data collection for this report closed, it is still considered an influencing factor since the week leading up to the holiday typically sees a slowdown in mortgage activity.)

Mortgage interest rates, Mortgage rates — The mortgage interest rates for traditional mortgages have continued their steep decline.

FREDDIEMAC

Sam Khater, Freddie Mac’s Chief Economist, commented that demand activity has seen double digit increases for the past four months, but points out, “Heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity.”

The other record that was broken last week is the amount of money people are borrowing to buy a home. The MBA survey shows purchasers borrowed an average of $368,600 for their loan—which is the highest the MBA has recorded in the survey’s 30-year history. (The weekly report covers over 75% of all retail residential mortgage applications in the U.S.) As rates have dropped, purchasing power has increased, with Redfin reporting that buyers who have a $2,500 per month budget for housing can now afford a home that is at least $30,000 more expensive compared to a year ago.

The rates might see some small fluctuations but they aren’t going to see any large increases for the next few months. The biggest hurdle continues to be lack of supply in popular markets. But if people are able to borrow more money, that could entice sellers to list their homes this year while they have a greater chance of selling at a higher asking price.

Here’s how to qualify for a mortgage in retirement

September 9, 2020 by Kathy Reichle Leave a Comment

It’s not uncommon for retired homeowners to want to relocate or downsize.

Yet if the move involves buying a house and financing that purchase, they may discover that qualifying for a mortgage is a bit different from the last time they bought a home. Not only have lenders tightened their credit during the pandemic, retirees generally have left a steady paycheck behind.

“It can get tricky for retirees,” said Al Bingham, a mortgage loan officer with Momentum Loans in Sandy, Utah. “You can have a lot of money but show very little income and have difficulty qualifying for a mortgage.

“It frustrates a lot of them,” Bingham said.

The average interest rate on a 30-year mortgage is just above 3%, while for a 15-year fixed-rate mortgage, it’s about 2.7%, according to NerdWallet. With rates low and inventory in many markets tight, it may be necessary for retired homebuyers to do some strategizing and planning ahead.

Of course, the typical aspects of qualifying for a mortgage — such as having a good credit score, monthly debt that isn’t too high and the required down payment — would apply, as well.

The specifics will depend on the lender and the type of mortgage you’re seeking. Loans that are backed by Fannie Mae and Freddie Mac come with requirements that lenders must adhere to, while private mortgage lenders could have their own set of standards.

Qualifying based on income

The most common way for retirees to get a mortgage is by qualifying based on income, said certified financial planner Daniel Graff, a principal and client advisor at Sullivan, Bruyette, Speros & Blayney in McLean, Virginia.

Lenders generally will look at your last two years’ worth of tax returns to see what that amount is. It may include, for instance, Social Security, pension income, dividends and interest.

However, your taxable income may not be enough to qualify for the loan on its own. That’s where a retirement account like a 401(k) plan or individual retirement account can come into play.

Chart showing the average 30-year fixed rate mortgage from 2005 through August 2020.

“You basically create more cash flow to satisfy the lender,” said CFP David Demming, president of Demming Financial Services in Aurora, Ohio.

The idea is that you take distributions to help you qualify for the mortgage, even if you don’t really need the money. As long as you’re at least age 59½, you can tap your IRA or 401(k) plan without paying a 10% early-withdrawal penalty.

And, under rollover rules applying to retirement accounts, you can put the cash back within 60 days without the distributions being taxable. Beyond that time frame, however, the withdrawals would be locked in and you’d owe income taxes on the money.

Meanwhile, the lender would see the income on your bank statements, where the money came from and when it hit your account.

Graff said he has helped with two mortgages for clients this year that involved taking distributions from an IRA for two months so they could qualify and then returning it under the 60-day rollover rule.

However, he said, “My mortgage lenders are telling me that they are getting a bit more strict on the historical verification, which may restrict this opportunity in the future.”

In addition to seeing verification of the required income, lenders will want to verify that the distributions can continue for at least three more years, Graff said.

Sarah O’Brien

CNBC

Seattle-area home prices rise faster than nearly every other U.S. city, driven in part by younger homebuyers

August 26, 2020 by Kathy Reichle Leave a Comment

An aerial view of West Seattle, looking west from White Center. (Ken Lambert / The Seattle Times)

Like much during the pandemic, the latest news on home prices inspires a definite sense of deja vu.

For the fifth month in a row, home prices around Seattle rose faster in June — 6.5%, year-over-year — than any of the nation’s other top 18 metro areas, save Phoenix, according to new data from S&P CoreLogic Case-Shiller Home Price Index. That’s more or less the same rate of growth we’ve seen since spring.

Price growth in King, Pierce and Snohomish counties topped national averages for the eighth month straight. National year-over-year home price growth of 4.3% in June pointed to a “stable” market, said S&P Managing Director Craig Lazzara in a statement. Prices rose in each of the 19 large cities that Case-Shiller tracks; among just those metros, year-over-year price growth averaged 3.5%. (Typically, Case-Shiller examines home prices in 20 metro areas, but data for the Detroit metro area has been unavailable since the start of the pandemic.)

A major imbalance between the number of homes for sale and a swell of interested buyers on the market has boosted prices. Until very recently, far fewer people were listing their homes than did in 2019. Many would-be sellers decided instead to take advantage of historically low mortgage rates to refinance their homes.

Price growth in the Seattle metro area has been driven by an uptick in cost for the area’s most affordable homes. Prices rose nearly 9% year-over-year among homes that sold for less than $448,069, which represent the most affordable third of all homes sold this spring. Among the most expensive third of homes, those selling for more than $670,317 — including most homes in King County, where a typical home now runs $727,500 — prices rose relatively more slowly, 5% compared to last year.

The lure of an under-three-percent mortgage has drawn younger buyers to the market, many likely for the first time. Across generations, only millennials are taking out more for-purchase loans than last year, according to data on VA loans from the Department of Veteran Affairs. The number of Seattle millennials who received for-purchase loans in the first nine months of the fiscal year rose 21.8% over the same period the previous year.

Refinances, however, have swollen a whopping 276% across all demographics, compared to the previous period.

Katherine Khashimova Long

Seattle Times business reporter

Mortgage Rates Reach All-Time Low

April 30, 2020 by Kathy Reichle Leave a Comment

April 30, 2020

The size and depth of the secondary mortgage market is helping to keep rates at record lows. These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April. While many people are benefiting from low mortgage rates, it’s important to remember that not all people are able to take advantage of them given the current pandemic.

Current Mortgage Rates Data Since 1971 xls

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Mortgage Rates Drop Significantly

August 12, 2019 by Kathy Reichle Leave a Comment

August 8, 2019

There is a tug of war in the financial markets between weaker business sentiment and consumer sentiment. Business sentiment is declining on negative trade and manufacturing headlines, but consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.

Current Mortgage Rates Data Since 1971 xls

30-Yr FRM

3.6%

Down 0.15 1-Wk

Down 0.99 1-Yr

0.6 Fees/Points

Opinions, estimates, forecasts and other views contained in this document are those of Freddie Mac’s Economic & Housing Research group, do not necessarily represent the views of Freddie Mac or its management, should not be construed as indicating Freddie Mac’s business prospects or expected results, and are subject to change without notice. Although the Economic & Housing Research group attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. The information is therefore provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution. Alteration of this document is strictly prohibited. ©2019 by Freddie Mac.

3 Reasons to Invest in Single-Family Rentals

February 21, 2019 by Kathy Reichle Leave a Comment

A rental investment can be a safe haven in a volatile market.

With high demand and low supply, the housing market should remain strong in 2019

FEW PEOPLE TALK WITH their financial advisors about alternative investments like purchasing a property, but real estate may be a good strategy this year. It’s one that more high net worth investors seem to be employing to cope with market volatility.

A December 2018 survey from Millennium Trust Company found an increasing preference for alternative investments, including real estate. Among those surveyed who held real estate, 73 percent favored single-family rentals.

Robert Mulcahy, senior vice president of production and strategic initiatives at Angel Oak Prime Bridge in Atlanta, says a rental property investment is a great strategy for any investor, regardless of net worth. The market gyrations of 2018 and the outlook for real estate in the year ahead are compelling reasons to examine the benefits of owning a rental property.

“Since markets don’t exist in a vacuum, there tends to be a beta between the rental market and the stock market,” says Jason Haber, a real estate agent at Warburg Realty Partnership in New York. The difference, he says, is volatility.

“The rental market is reactionary to the general direction of the stock market,” Haber says, meaning that daily swings in stock prices don’t effect real estate investors like equity investors. “Real estate investments provide for more stability, and many markets can outperform the Dow and S&P 500.”

That may be music to the ears of volatility-weary investors. Here are three reasons why now is the perfect time to consider a property investment:

The 2019 outlook is strong.
Housing is bolstered by low unemployment.
Renter profiles are shifting.

The 2019 Outlook Is Strong

Quinn Palomino, co-founder and principal at Virtua Partners in San Diego, is optimistic about the outlook for leasing.

“Demand is high and supply is still constrained, particularly for entry-level housing,” she says. “We anticipate rent increases will outpace the overall commercial real estate market, landing in the 5 to 7 percent range.”

Palomino says these rentals are positioned to outperform stocks in 2019, as the market reacts to a slowdown in economic growth and recession fears. She cites the Great Recession, in which “single-family rentals did not have a down year in occupancy or rental rates.”

Housing Is Bolstered by Low Unemployment

Haber says that while the fundamentals of individual rental markets differ, two things are driving momentum: employment and interest rates.

“Generally speaking, a low unemployment environment translates into a stronger housing market,” Haber says. “Right now, we have both low unemployment and low interest rates. This dynamic has kept the housing market healthy.”

Additional rate hikes could give the single-family rental market an additional boost, says Nick Giovacchini, director of client services at AlphaFlow in San Francisco.

“With the Fed’s expectation of two more rate hikes this year, mortgage rates should rise once again,” he says. “(This) could potentially price some newer home buyers out of the market and keep them focused on rentals.”

Renter Profiles are Shifting

While low interest rates and job growth are leaving a positive mark on housing, Kevin Sneddon, founder and managing partner of the private client team at Compass in New York, says there’s a larger dynamic to consider.

“Renting single-family homes has become a new norm,” Sneddon says. He identifies three specific renter profiles that are fueling the new normal in the housing market.

The first is renters who can’t afford to buy because they lack a down payment on a mortgage. The second is those who don’t want to buy because they want flexibility. And the third group includes those who choose not to buy because they feel that real estate values will soften in the future.

Palomino says it’s largely millennials who are the main driving factor. “Millennials don’t have the same attachment to homeownership as preceding generations, are more transient and are overburdened with debt,” she says. “Yet, as millennial couples have children, they want to move out of the apartment and into a house with a backyard and garage.”[

It’s not just the younger crowd, however, who is on the hunt for homes to rent.

“As boomers are moving out of their previous homes, many are looking to downsize, but have less cash than expected,” Giovacchini says. As a result, they “may have to rent rather than purchase a new home.”

Those set on steering the course of single-family rental homes can benefit from doing their homework.

“The single-family rental market needs to be analyzed on a local level,” says Janine Yorio, CEO of Compound in New York. “We’ve seen tremendous discrepancies in rental growth and price appreciations across different locales.”

The biggest risk, she says, is the cyclical nature of real estate. Yorio makes a case for investing in multifamily properties through a real estate investment trust.

“Single-family investments at the individual level are far more risky than diversified REITs,” she says. “An owner needs to be ready for prolonged periods of vacancy, capital improvement requirements and dealing directly with problematic tenants.”

Yorio also says not all single-family residential investments are created equal: “It’s important to pay attention to more than just the initial rental yield or cap rate and pay attention to the near- and medium-term cash flow at the property level, taking into account required repairs and maintenance.”

There are also subtle differences in investing in a townhouse versus a single-family home. Town homes can carry fewer cost considerations regarding maintenance, repairs and landscaping if those expenses are handled by a homeowner’s or condo association.

Sneddon says the target tenant profile matters, as does your exit strategy. Most important, he says, is the likelihood that the asset will increase in value over time.

“Things like location, property condition, property style, local job growth, etc. are important factors to consider when selecting which single-family rentals to acquire,” he says.

Investors shouldn’t expect renting a home to be a passive investment.

“There’s a lot of work in being a landlord,” Yorio says. But outsourcing leasing or property management to a trusted team can ease the burden.

By Rebecca Lake, Contributor

Americans are starting to feel better about buying homes — sort of

February 13, 2019 by Kathy Reichle Leave a Comment

The share of Americans who say it is a good time to buy a home increased 4 percentage points to 15 percent in January compared with December, according to a monthly survey from Fannie Mae.
Home price gains have been shrinking since last summer and are now rising at the slowest pace in more than six years, according to CoreLogic.
The share of Americans who say home prices will go up fell 1 percentage point to 30 percent.

Daniel Acker | Bloomberg | Getty Images
Prospective home buyers arrive with a realtor to a house for sale in Dunlap, Illinois, U.S., on Sunday, Aug. 19, 2018.

More consumers now see the door to homeownership slowly squeaking open, but they still think it’s pretty pricey.

The share of Americans who say it is a good time to buy a home increased 4 percentage points to 15 percent in January compared with December, according to a monthly survey from Fannie Mae. The share is still down sizably from the start of 2018, when housing demand was soaring and home prices were rising at a much faster clip.

Home price gains have been shrinking since last summer and are now rising at the slowest pace in more than six years, according to CoreLogic. Consequently, the share of Americans who say home prices will go up fell 1 percentage point to 30 percent. That share has been declining for four straight months and is down a whopping 22 percentage points from a year ago, according to Fannie Mae.

While consumer confidence in housing is rising this year, it was still a bit unsteady in the fourth quarter of last year.

Seventy-six percent of potential home buyers estimated they could afford fewer than half the homes for sale in their markets, according to a year-end poll from the National Association of Home Builders. That share is lower than the 79 percent who shared that perception in the fourth quarter of 2017, but not by much.

“In the year ended in the fourth quarter of 2018, there was not a lot of change in how homebuyers perceived their ability to afford homes available in their markets,” said Rose Quint, author of the NAHB survey.

Attitudes toward homebuying are improving this year because it appears that mortgage rates will not be increasing as much as previously expected. The share of those who expect rates to go up over the next year fell 3 percentage points to 53 percent in the Fannie Mae survey. The Federal Reserve has signaled it may not be as aggressive in hiking interest rates as previously forecast.

“Overall, these results are in line with our forecast that, amid improving affordability conditions, home sales should stabilize in 2019 after declining last year for the first time in four years,” said Doug Duncan, Fannie Mae’s chief economist.

Cooler home prices and lower interest rates certainly increase affordability and help consumers feel better about buying, but the biggest change influencing that sentiment is consumers’ perception of their own wealth.

The share of those who say their household income is significantly higher than it was a year ago increased 8 percentage points to 27 percent. That is 11 percentage points higher from the same time last year.

In addition, fewer Americans said they were concerned about losing their jobs.

Diana Olick

5 Signs It’s Time To Refinance Your Mortgage

February 6, 2019 by Kathy Reichle Leave a Comment

You’ve probably heard that refinancing your mortgage can save you money. While that’s true in many cases, refinancing needs be done at the right time in order to result in a lower monthly payment and it should be done for the right reasons. Below, we’ve outlined some scenarios in which refinancing makes sense. Read them over to determine if it could be the right move for you.

You can get a better interest rate

Interest rates play a huge role in how much money you pay for your mortgage each month, as well as over the life of the loan. For example, if you put 20% on a $200,000 home with a 30-year loan, at a 4% interest rate, you would pay around $763 per month. At a 4.5% interest rate, you would pay around $810 per month. That’s a difference of $47 per month or $564 per year.

You’ve probably also heard on the news that interest rates are climbing. The reality is, however, that while they’re getting higher than they’ve been over the past few years, they’re still relatively low from a historical perspective. If you bought your house before the recession, you’ll likely be able to get a much better interest rate and you should be able to put some money back in your pocket.

Your credit score is higher

The interest rate you pay on a loan will be determined by two things: the prime rate and your credit score. The prime rate is set by the market and refers to the lowest interest rate at which money can be borrowed, commercially. This acts as the base for your rate. Then, a percentage is added to that rate, based on your borrowing history. The better your credit score, the lower that percentage will be.

If your credit wasn’t so good when you first bought your house, it’s likely that your interest rate is fairly high. However, if you’ve taken some steps to clean up your credit since then, there’s a good chance that you’d now qualify for a better rate. Refinancing will give you a chance to access that better rate and to lower your monthly payment, overall.

Your ARM is about to adjust

Typically, what makes adjustable-rate mortgages (ARM) so attractive is they come with an initial fixed-rate period, during which the interest rate you pay is often lower than you might find with a true fixed-rate option. However, after that initial fixed-rate period is over, your interest rate will begin to adjust at regular intervals. At that point, your rate will fall in line with what’s currently being offered on the market, plus the percentage that’s determined by your credit score.

For example, a 5/1 ARM comes with a five-year fixed-rate period, after which the rate will readjust every year. It’s common to see homeowners look to refinance as they near the end of their fixed-rate period. Depending on the introductory rate they were given and current market conditions, they might be facing the threat of a mortgage payment that’s a lot higher than the one they’re used to making. At that point, it makes sense to either refinance into a fixed-rate mortgage, which would offer more stability, or another ARM.

You need money for a big expense

If you need money for one of life’s big expenses, you can do what’s known as a cash-out refinance. Unlike a regular refinancing situation, with a cash-out refinance, you borrow more money than you currently owe on your home. The difference between what you borrowed and your mortgage amount is then given to you in the form of funds that can be used in any way that you see fit.

Since doing a cash-out refinancing often comes with a lower interest rate than getting a personal loan or paying with a credit card, people tend to use this method of financing as a way to pay for big-ticket items. It’s not uncommon to see someone choose to do a cash-out refinance in order to pay off medical debt, finance home improvements, or to cover the cost of a child’s college education.

You need to pay less

If you suddenly find yourself needing to pay less on your mortgage, either due to a change in income or added expenses, refinancing can be a good option to help put some money back in your pocket. As stated above, though today’s interest rates are rising, they are still at historic lows. Depending on when you first took out your mortgage, you may be able to get a much better interest rate in today’s market, which will save you significantly.

However, if the change in interest rate is not enough, you could also extend the terms of your loan. Since the amount that you owe on your home is lower now than it was when you first bought it, you’re borrowing less money when you refinance. Spread out over a new loan term, – typically either 15 or 30 years – your monthly payment will be smaller.

Tara Mastroeni

When Is the Best Time to Buy a Home in 2019?

January 23, 2019 by Kathy Reichle Leave a Comment

Knowing the right time to buy house is just as important in the home buying process as knowing what house you’re going to buy, where you’re going to buy it, and how you’re going to buy that home.

Why is the “when factor” so important?

As with most financial endeavors, timing can be everything, and that goes double for landing a dream home. Pricing, interest rate levels, the calendar month of the year, and your own personal cash situation all can factor in on when to buy.

There’s also something of a Zen factor in buying a home.

To a prepared home buyer, there’s often a vibe on the time to purchase a home – conditions like cash and opportunity are optimal, the seller of an attractive property is willing to sell at a good price, and the buyer’s personal life (i.e., newly married, expecting a new baby, or just got a big bonus, for example) is in a place where the time to pull the trigger on a new residence is now – and not next month, or even next week.

Reality also dictates when to buy a new home. For instance, your employer has relocated you cross-country and you start your new post in two weeks. In that scenario, the time to buy really is right now, or you may not have a place to call home for a while.

Let’s take a good look at the “when to buy a home” issue, and break down the elements that dictate the “timing” factor in signing on the home mortgage dotted line.

The Best Times to Buy a Home

There are multiple factors that go into the “when to buy a home discussion.” The following factors are among the most critical, and should be evaluated first.

1. Early in the Year

The calendar is a good barometer for the best time to buy a house.

In general, prices are less expensive at the end of the year, especially in December. Primarily, that’s because the inventory that’s on the market comes from owners who have to sell, and are more willing to negotiate.

That could mean an owner whose company is transferring him or her to another state, and the owner must move fast. Or, the homeowner is hard up for cash, and can’t afford to wait until the traditionally busy spring home selling season.

The takeaway on the late-year calendar issue is this – people who are selling their home in November and December, in the midst of the holiday season, are often selling because they have to. Buyers can take advantage of that scenario and cut a better deal on a home price later in the year.

Waiting until January and February can work in the home buyer’s favor, as well.

Data shows that U.S. home prices cost about 8.4% less in the first two months of the year than they do in July and August, in the midst of the busy summer selling season. That scenario also falls in the “have to sell” as opposed to “want to sell” home seller equation.

2. When Interest Rates Are Low

In the past few years, the Federal Reserve has sustained a policy of raising interest rates to keep inflation low, and the economy stable.

In early 2019, 30-year fixed mortgage interest rates rose to between 4.5% and 5.0%, depending on the lending institution. Only two years ago, when interest rates were much lower, home buyers could grab a 30-year fixed-rate mortgage for under 4%.

That disparity is important and here’s why.

Consider a $300,000 home, purchased with a $60,000 down payment, at an interest rate of 5.0% (generally where mortgage rates are in early 2019.) With a $240,000 mortgage loan, the average monthly payment on the property would be $1,288.37, while the total of 360 monthly payments amounts to $463,813.88. More to the point, total interest paid over the entire course of the loan would be $223,813.88.

But what if you can get the same mortgage loan at an interest rate of 4.0%, like many buyers got two or three years ago, when rates were lower?

In that event, the monthly mortgage payment would amount to $1,145.80, while the total mortgage principal and interest payment over 360 months would amount to $412,486.82. Total interest paid over the course of the loan would be $172,486.82 – representing a total savings of over $50,000 on your mortgage interest payments.

That’s why it’s important to keep a sharp eye on interest rates. All things being equal, and with good credit, a savvy home buyer strikes when rates are lower, and can save a bundle on the deal.

3. When Your Financial Situation Is Optimal

The best time to buy a new home can also be when you’re cash flush, your credit score is strong, and you don’t have a lot of large debts.

This could be the case in several scenarios:

You just finished paying off your student loans, and have extra cash for a home.
You just received a big raise or bonus, and you have more money for a good down payment.
You just got married, and between two spousal incomes, you have more cash for a new home purchase.
You just sold your home of 20 years (for example) and with plenty of cash liquidity in the home, you have plenty of money to buy a new home, without having to resort to a big mortgage.
You just finished paying off your kids’ college costs, and have extra cash for a home purchase.
You just received a big family inheritance, and you have the money to buy a home.

Of course, here are no absolutes in the above cases, as everyone’s personal financial situation is unique.

The larger takeaway still holds though – the more money you have on hand, the better time it is to buy a new home without having to depend too much on a large, interest-heavy mortgage loan.

4. When Inventories Are High

Another great time to buy a home is when there are plenty of homes available on the market, and home sellers need to be price competitive to sell their homes and get them off the market.

Usually home inventories are heaviest in the spring and summer selling seasons, where plenty of families put their homes on the market because foot traffic is heavy and because buyers want to move in before Labor Day, and get their kids ready for school.

Data shows that the highest month for home-for-sale inventories is May, followed by April and June. The months with the lowest inventories are December, November and January, in that order.

Again, you might be able to strike a great deal in the winter months, as owners are more likely to have to sell their homes. But the data shows there are more homes on the market, and more competition on price, in the spring and summer seasons.

5. When the Economy Is Doing Well

It’s worth looking at key economic indicators like housing starts and the U.S. unemployment figures when evaluating the best time to buy a home.

Besides the likely fact that since the economy is doing well, you must be doing well, too, there are other factors in play when studying the economy. That’s particularly the case with two key indicators:

New construction. When new home construction is strong, there are more homes to buy, and ample supply almost always relieves pressure on home prices. That’s a good time to act if you have the cash and are ready to buy a new home.
Income and employment numbers. When consumer sentiment is strong, consumer income is up, and employment is near maximum levels, buyers typically have more cash to buy a new home, and stronger credit that translates into lower mortgage interest payments. That could be a good time to buy a home, too – when you’re cash flush.

Buy a Home When It Feels Right for You

Again, there are no hard and fast rules here – just the likely (but not guaranteed) tendencies, time lines and trends that combine to make it a good time to buy a home.

Leverage the factors listed above and see if they don’t spark something deep down inside of you, the great American home buyer, and see if you can’t get a great deal on the home of your dreams.

By Brian O’Connell

Mortgage Rates Hit Three Percent

Primary Mortgage Market Survey^®

U.S. weekly averages as of 03/04/2021

Mortgage Interest Rates Break Records And Fall To The Lowest Levels Ever Recorded

Here’s how to qualify for a mortgage in retirement

Qualifying based on income

Seattle-area home prices rise faster than nearly every other U.S. city, driven in part by younger homebuyers