We're heading into the cooler autumn months. Football season is in prime swing. The kids have been back in school for a while, retail "popup" Halloween stores seem to be every where and the holidays are coming up quickly already. But best of all about this time of year is the ability to claim a deal on a home. That's because those who buy a home in the fall may be take advantage of factors working in their favor.
The best time to buy a home is when market conditions are preferable, competition is low, and interest rates are on the decline. While those would be optimal conditions, they may not all exist at the same time or even at all. Despite that, practically any real estate agent will tell you: Buy a home in the fall versus waiting until next year, when you may pay more.
There are many reasons why you want to act soon, without delay. Wait too long and this window of opportunity may close.
More favorable mortgage rates, less competition
Interest rates really don't have a season, but mortgage rates are likely to be more favorable this fall than they have been in a couple of years. Lower rates mean improved buying power, so you may be able to make to shop in a higher-cost range of propeties, to be able to sweeten your bid to get a house you really like. Rates are still high enough as to keep still some buyers on the sidelines, and if you can qualify for a loan -- or are in a position where you don't need a mortgage -- you have an advantage over a lot of would-be buyers this fall.
While this doesn't mean you'll have the market all to yourself, it does mean sellers will be seeing less buyer traffic and fewer competing offers, so your offer will stand out more clearly. It also lessens the likelihood that you'll be outbid or become embroiled in a bidding war for a given property.
There's no knowing what mortgage rates may do in the future, but one thing is certain: If they remain at present levels for a period of time, this allows more buyers time to "catch up" to where the market is, so waiting to buy a home until next spring could bring greater and more capable competition -- and you'll still have the same interest rate on your mortgage as if you had made a move now.
If you can qualify and can get in now, keep in mind that the interest rate you get today probably won't last forever, as there will be refinance opportunities (and perhaps multiple ones) as the years wind forward.
Related: How to Negotiate a Better Mortgage Rate
Sellers may be more aggressive, too
A lot of families like to purchase homes in the spring and summer months. That ensures their children are settled in before the start of the fall school year. We are now past that point.
Homes that were listed in the summer months, but which haven't sold yet are languishing on the market. These sellers may have to drop their prices if they haven't already, or may be willing to accept concessions or contingencies they wouldn't during the busier spring and summer selling seasons. That represents an advantage for home shoppers.
"There is also generally a large increase in properties trying to sell before Thanksgiving and the holiday season bring the market to a harsh stop. The longer a property is on the market this time of year, the cheaper it gets," says Aimee Fink, agent with Douglas Elliman in New York City.
Also, in most markets, the spring and summer selling seasons were slow.
"That left somewhat more inventory in many neighborhoods, regardless of price and location. If inventory continues to grow or sales activity slow further, prices may continue to soften," Fink adds. "Waiting until next spring could backfire, as inventory could be decreased by then."
Patient but diligent fall shoppers will likely be rewarded.
"The closer you get to the holidays, the more drastic the price cuts will be," notes Fink. "And being flexible with a move-out/move-in date will work to your advantage as well."
Related: Essential Tips for Holiday Home Sellers
There are fewer rivals for the same home
Another thing autumn buyers have in their favor? Mother Nature and her harsh uncertainties. This is the season when the days get shorter and the weather gets worse in many parts of the country. A lot of buyer prospects opt to wait for spring and avoid windy, rainy, snowy, and bitterly cold conditions that can happen by late autumn.
"As a result, sellers typically have fewer showings, especially during the week. In many parts of the country, the sun begins to set around the time people get off of work. This discourages them from looking at houses," says Benjamin Ross, Realtor with Mission Real Estate Group in San Antonio.
Additionally, "many diehard football fans set their schedule around Sunday games. This cuts into the time they are willing to look at a property," Ross adds.
The bottom line? There is less competition among fellow buyers. That means less of a chance for a bidding war or another buyer snatching up a property before you've even had a chance to visit it.
Remember, too, that house hunters with kids will likely remain on the sidelines. That's because they probably don't want to pull their children out of school and move into a new school district midway through the year.
Related: Is winter the best time to buy a home?
Seasonal home-price declines
Driven by buyer demand, existing home prices do have some seasonality. The highest prices usually occur in the second quarter of each year (April, May, June) during the busiest time for the market. After that, prices begin to soften up a little during the third and fourth quarters of each year (July-December) -- right in the heart of fall. Looking over the last couple of years, none of the top 50 metro housing markets saw lower costs in the second quarter, but the third and especially the fourth quarter of each year saw many to most markets sporting lower overall home prices. You can see what's happening to home values in your market as well as more than 400 other metropolitan areas with HSH's Home Value Tracker.
Fall home buying: Be prepared to act
If you want to increase your chances of landing the best deal this fall, do your homework. Get preapproved for a mortgage. Have the necessary down payment saved up. Improve your credit score. And find the right professionals, including an experienced real estate agent and mortgage lender.
"No one has a crystal ball to predict the future. Next year, it could be a lot harder to get the home you want. Put yourself in a position to buy now, if you can afford it," says Fink.
This article was revised by Keith Gumbinger.
My husband plans to purchase an affordable home in California. I never knew that buying a house in the fall would be beneficial since there will be few rivals. I hope we'll be able to find a cozy house around Bakersfield at an affordable price.