Is winter the best time to buy a home? Possibly. Depending on where you look and what you want, buying in winter can be a very smart move.
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Buying in winter: price
Did you know homes get less expensive in winter? Well, they do. And it's simply a question of supply and demand.
The National Association of Realtors® (NAR) says, "The slowest months of selling activity are November, December, January and February." And that gives buyers a big advantage.
Because when you're buying in winter, there's a good chance your seller is "motivated," which is the word real estate agents use when they mean "desperate." Many sellers at that time of year are marketing their homes because they:
Listed in the spring, summer or fall at too high a price and are now realizing their homes are going to look very stale come springtime.
Have intense personal pressures (health, work, marital or financial issues, perhaps) that are forcing them to list at a bad time.
Either way, they're more likely to be open to offers in winter than at other times.
Related: Buying a Home in Summer (Pros and Nos)
How much can you save?
Seasonality in home prices
There are calendar seasons, meteorological seasons and housing market seasons. For purposes of comparison, we thought it best to compare the three months where home sales activity typically peaks each year and the three months where the least amount of activity typically takes place.
As such, we consider a "spring/summer season" containing the months of May, June and July, and a "fall/winter season" covering the months of November, December and January. Each period has about six weeks before and six weeks after their respective solstice.
The median price of an existing home sold usually peaks in June of each year. This has been the case in eight of the last nine years (the pandemic-distorted spring/summer 2020 period being the outlier). Even including that anomaly, the median decline in price when comparing the spring/summer period against the fall/winter period is 5.1%. For example, 2023's spring/summer's average median price was $404,033; by the time the 2023 fall/2024 winter period rolled around, the average median home price was $382,600 -- a 5.3% decline, so just about a typical reduction.
The spring/summer period of this year featured a new record high for existing home prices. For the spring/summer 2024, the average median price of a home sold was $421,833. While we won't of course know the actual outcome of the 2024-2025 fall/winter season (data to fill in those months won't come until December, January and February, respectively) it's reasonable to expect that the decline in median price for the coming period will be 5.1%, and that should see average median home prices this fall/winter decline to $400,252 for the period.
So, and at least on a relative basis, a prospective homebuyer venturing out into the cold and dreary months in search of a home will be rewarded for that effort. That 5.1% decline in the cost of a home would save more than $21,000.
A lower purchase price means a lower mortgage amount, and a lower mortgage amount means easier qualifying and a lower monthly payment, too -- all things being equal, a spring/summer buyer with a 10% down payment ($42,183) would see a mortgage amount of $379.650, and at a 6.5% interest rate, a monthly principal and interest payment of $2,400.
The fall/winter borrower would need a $40,025 down payment to make the 10% down threshold, so over $2,000 less. The loan amount would also be lower, too -- $360,227 -- and the monthly principal and interest payment would be $2,277 -- $123 per month less.
Over the full 30 years, the difference in total interest cost between the spring/summer buyer and the fall/winter buyer is nearly $25,000.
Buying in winter: Less harried transaction?
Typically, fewer people are selling and buying homes in winter. However, over the last nine seasonal comparisons, just four saw a lower sales volume in the fall/winter period than during the spring/summer one; al-time record-low mortgage rates in two of the five years account for some of the unexpected distortion. Still, it's not a given that sales activity will be slower in the fall/winter compared to the spring/summer season.
In the four years where sales did fall off, the decline is pretty significant, averaging a 9.1% drop in sales volume. In years where activity is on the upswing, the average boost in sales compared to summer is 9.7%. There's no way to know what's in store for the fall 2024/winter 2025 period; applying the average decline factor would see sales ease to 302,000 per month -- a 3.63 million pace, down from the 333,000 monthly average sales rate (3.99 million annualized) of the spring/summer months.
If we calculate using the average increase factor, this would put the total at an average 365,000 homes sold each month -- a 4.38 million annualized pace. Given that this would be well above where the existing sales market has been, and that mortgage rates remain fairly high, more likely is that this coming season will split the difference -- about a 4.1 million annual pace seems likely when all is said and done..
With the pace of home sales already pretty tepid, consider what any additional slowing might mean for property professionals -- real estate agents, mortgage loan officers, home inspectors, real estate attorneys, appraisers, moving companies. Their workload hasn't been all that burdensome for a while, and any decline in activity opens up the schedule even further.
This can allow more time to spend with clients and customers, exploring more housing and financing options. It can allow professionals to more easily make time to help in tricky situations, and you can be more deliberate.
Related: Five Tips for Holiday Home Sellers
Advantages of buying a home in winter
You're already getting a bargain and possibly an easier transaction with better customer service when you buy a home in winter. What more could you want? Well, there are a few more potential pros:
There may be tax advantages if you buy in November or December, before the tax year changes. But don't rely on those before you take professional advice. See them as a welcome bonus if they materialize.
You'll see the home at its worst -- If you like a home on a drab and dreary winter's day, you'll love it come the summer when the sun's out and the yard's colorful. You're also seeing it under stress. You're going to notice immediately if the roof, plumbing and heating are holding up in challenging times or if the windows or doors are drafty.
You might save on your moving costs and some of those of your closing costs that you're able to shop. Moving companies have summer and winter rates and the winter ones are lower, and housing professionals such as home inspectors may be willing to quote more competitive rates when they're in their quiet periods.
Things are looking good. But there are some downsides…
Related: Buying a Home in the Fall
Cons of buying home in winter
It's hardly worth even mentioning the cons because they're so obvious:
You're buying in winter! That's fine if you're moving to warmer climes. But if you're going somewhere less balmy, expect problems. The American Moving and Storage Association says you should "plan for delays." Oh, and it's your job to make sure snow and ice are cleared at both homes, if you haven't sold the one you're exiting.
If you have children, they may be changing schools partway through the year; some find that difficult.
There's a flip side to the advantages of seeing that the home is warm, dry and draft-free. You can't check the pool or air conditioning.
There are fewer homes on the market in winter, meaning fewer choices.
Delays may be more likely. Back in 2019, Ellie Mae's Origination Insight revealed that it can take a few days longer to close a loan in winter than summer. More currently, ICE Mortgage Technology reports that it's taking about 42 days to close a purchase-money mortgage. Keep in mind that causes of delay can range from holiday disruptions to weather-related glitches.
For most, those first and second points are the most compelling. However, if you don't have kids -- or yours are tough -- that second one doesn't apply.
And then your main concern is the first. But if you hire a good moving company and make plans and preparations with care, you can minimize the risks of disruption. And it's only one day. Or so you hope.
If you're looking for a relative bargain when buying a home, it may just be that winter offers just what you're looking for: Less competition for available homes from other buyers, the chance at a price discount, and maybe even a smoother transaction. If you're up for the challenges it presents, winter may just be the best time to buy a home.
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This article was revised and updated by Keith Gumbinger.
