With mortgage rates on the decline and housing supply ramping up, affordability is on the rise for many, Realtor.com’s latest market analysis found that much anticipated market relief is on the way, and many potential buyers are stepping off the sidelines.
Realtor.com’s Sixth Annual “Best Time to Buy Report” examined listing prices, inventory levels, new “fresh” listings, time on market, homebuyer demand, and price reductions, revealing that the “Best Time to Buy” in 2024 will be the week of September 29-October 5.
During this week, Realtor.com found that buyers could save in excess of $14,000 compared to summer’s peak price on the median priced home and could see as much as 37% more inventory than at the start of the year. According to Zillow, the average U.S. home value is presently $362,481, up 3.3% over the past year. This week in particular historically has shown the best balance of market conditions that favor buyers. Inventory tends to be high, prices are below peak levels, demand is waning, and pace of the market slows to a more manageable speed.
“Unlike the past few years, we are seeing ample for-sale inventory which could soak up any late-season demand in many markets, making the fall a great time to buy even if falling mortgage rates amp up more demand than is typical,” said Danielle Hale, Chief Economist, Realtor.com. “This year buyers who are looking for that optimum mix of ample options and the potential to save on list price are going to find some of the best market dynamics in years during the first week of October.”
Waiting for This Target Week
Realtor.com concluded that should potential buyers put off their home purchase plans until the week of September 29-October 5, they will:
- Save more than $14,000 relative to the summer’s peak price of $445,000
- Be able to choose from up to 37% more active listings than at the start of the year
- Have more time to decide as homes are expected to stay on the market for more than two weeks longer, on average, than during this year’s peak
- Be met with less competition as demand is expected to be 29.5% lower than peak buying periods
“If the Best Week feels like it is approaching too quickly, buyers may be happy to hear that the following two weeks are the second- and third-best weeks to buy,” said Hannah Jones, Senior Economic Research Analyst for Realtor.com. “These weeks boast many of the same benefits as the best week, but are just slightly less favorable due to falling new listing activity.”
Why This Particular Week?
In order to determine the “Best Time to Buy,” Realtor.com analyzed six supply and demand metrics at a national and metropolitan level that follow seasonal patterns, using data for 2018-2023 period (2020 data was omitted due to anomalies caused by the pandemic). Those metrics analyzed include: listing prices, inventory levels, new “fresh” listings, time on the market, homebuyer demand, and price reductions. Interest rates, which do not follow seasonal patterns, were not included. To account for 2024 market conditions, estimates reflect typical seasonal patterns layered on top of the most recent 2024 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. 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.
Factors Playing Into Buyers Favor
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 listing prices: Nationally, the best week could mean roughly 50,000 homes seeing price reductions, based on inventory estimates. This weekly price reduction rate would translate to a monthly price reduced share of more than 22%.
- Increased listings to choose from: The year 2024 has diverged somewhat compared to past years as sustained seller activity and tepid buyer demand have pushed inventory levels higher. If this trend continues, the first week in October may see active listings climb to their highest level since pre-pandemic.
- Less competition from other buyers: Home buyers shopping during the best week should expect less competition from other buyers. Historically, during the “Best Week to Buy,” demand is 29.5% lower than the peak, and 14.0% lower than the average week.
- A more manageable market pace: The best week historically slowed by 34.8% compared to the peak pace earlier in the year. With a peak market pace of just 44 days in June, based on seasonal trends and a cooling market, the Best Week is expected to add more than two weeks to the market peak.
Click here to read more about Realtor.com’s “Best Week to Buy” report.
The post When Is the Best Time to Purchase a Home? first appeared on The MortgagePoint.
