Need to Move? We're Approaching the Best Time to Buy in 2023

Rhea-AI Summary

Realtor.com® identifies the week of Oct. 1 as the best time to buy a home with reduced prices, increased inventory, and less competition

Positive

• Up to 17% more active listings than at the start of the year
• Savings of more than $15,000 relative to the summer's peak price of $445,000
• Less competition with demand expected to be 18.7% lower than peak buying periods

Negative

• None.

Although mortgage rates remain high, the week of Oct. 1, 2023 is expected to offer buyers the best overlap of reduced home prices and competition alongside increased inventory, according to Realtor.com^®.

SANTA CLARA, Calif., Sept. 13, 2023 /PRNewswire/ -- As mortgage rates hit their highest peak in more than two decades, Americans determined to make a home purchase this year are navigating a dauntingly difficult housing market. With approximately 4.2 million home sales expected in 2023, Realtor.com^® analyzed the numbers in its fifth annual Best Time to Buy Report, identifying key factors to consider when buying a home, apart from mortgage rates. According to the new report: inventory, prices, and competition from other buyers are in peak alignment across the nation during the week of Oct. 1, offering homebuyers a window of opportunity to make the most of their purchase this year.

This early-fall period will offer buyers the most favorable moment to buy during the remainder of the year, with more home listings, less competition, and lower prices. This week may offer:

• Up to 17% more active listings than at the start of the year.
• Savings of more than $15,000 relative to the summer's peak price of $445,000
• More time to decide as homes are expected to stay on the market for one week longer than during this year's peak
• Less competition with demand expected to be 18.7% lower than peak buying periods

"Mortgage rates have been more than 6% since September 2022 and could continue this trend for another year. Even as prices fell this summer, the monthly payment to finance a median-priced home was still more than 20% higher than last year,"¹ said Danielle Hale, chief economist, Realtor.com^®. "Mortgage rates continue to be a big wild card for Americans hoping to buy a home. Our analysis shows that buying in the fall does give buyers some more predictable advantages that could potentially ease the pain of higher rates and other stressful aspects of the home buying process, including making fast decisions and bidding wars."

Hale added, "For buyers trying to close this fall, saving a search on Realtor.com^® can help them stay up to date on homes in their price range without the work of having to refresh or recreate their search."

Since 2018, Realtor.com^® has analyzed home prices, inventory, listing views, and time on market, indicators that tend to follow regular seasonal patterns, to determine the best time to buy. Here's how these factors breakdown during this unique window:

Reduced Prices: Historically, an average of 5.5% of homes have price reductions during the Best Time to Buy period, which means roughly 40,000 homes across the U.S. could see price reductions, based on inventory estimates. During this week, prices typically dip 3.3%, compared to the typical season high, translating to $15,000 in savings. And in several of the largest housing markets around the country, home prices during the best week to buy can dip more than 10% below their peak price earlier in the year, potentially saving buyers tens of thousands of dollars.

Increased Listings To Choose From: This year, inventory will likely be lower than in years past as hesitant sellers shy away from the market. However, seasonal inventory trends are still expected and project 11.7% more active listings for the week of Oct.1 than the average week of the year, and 17.2% more than the start of the year.

Less Competition From Other Buyers: Home buyers shopping during the best week to buy can expect less competition from other buyers. This year, we saw a return to some pre-pandemic home shopping trends – with the most views per listing in the spring, and prospective buyers continuing to explore the housing market during the summer months – meaning fewer buyers to compete with this fall. While there may still be more competition than pre-pandemic, buyers can expect demand to be 18.7% lower than peak buying periods in 2023, and 13.5% lower than the average week.

A More Manageable Timeline: While homes are still spending less time on the market than pre-pandemic, the breakneck pace of the housing market has slowed. During the best time to buy, buyers can spend more time considering their options rather than making quick decisions, and sellers may become more flexible as their listings linger. Historically slowing by 29% compared to the year's peak pace – homes were on the market for an average of 43 days in June 2023 – buyers can expect more than one week extra to deliberate in early October.

More Fresh Listings: Despite the count of new listings having fallen this year as homeowners hesitate to sell amidst financial concerns tied to record-high mortgage rates, new listing declines have leveled off. Historically, the best week to buy has seen the addition of 18.9% more homes than at the start of the year, and early October is set to offer the highest influx of fresh listings compared to the remainder of the year.

Methodology:
Realtor.com analyzed six supply and demand metrics at a national and metropolitan level that follow seasonal patterns, using data for 2018-2022 period (2020 data was omitted due to anomalies caused by the pandemic). Those metrics analyzed include: 1) listing prices, 2) inventory levels, 3) new "fresh" listings, 4) time on market, 5) homebuyer demand (realtor.com views per property) and 6) price reductions. Interest rates, which do not follow seasonal patterns, were not included. To account for 2022 market conditions, estimates reflect typical seasonal patterns layered on top of the most recent 2022 weekly data.

Each week of the year was scored from 0 to 100 based on the number of active listings. A given week scored highly if it had more listings compared to other weeks of the year. The other metrics were scored in the same way, such that each week had six different scores for active listings, new listings, listing prices, days on market, price reductions, and views per property. (In the case of prices, lower prices score higher. Same with views per property).

Each week was then ranked by the average of those scores. The week with the highest composite score was considered the best time to buy. This week represents a balanced view of market conditions favorable for buyers.

About Realtor.com^®
Realtor.com^® is an open real estate marketplace built for everyone. Realtor.com^® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com^® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com^® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com^®.

¹ The monthly payment to finance 80% of a median-priced home was more than 20% higher in July 2023 than it was in July 2022

Media contact: press@realtor.com

 

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SOURCE Realtor.com