Homebuyers Find More Options in Fall

Since the start of the pandemic, homes have been in high demand leading to fierce competition, rapidly depleting inventory, soaring prices, and a swift market pace.

Realtor.com recently analyzed its numbers in the fourth annual Best Time to Buy Report, and found the best time to buy a home across the nation is the week of September 25 to October 1. This early-fall period will offer buyers a host of favorable factors, including more housing listings, less competition, and lower prices.

High prices, climbing mortgage rates and inflation reaching near-historic levels continue to put a dent in potential buyers’ budgets. As a result, the market finally started to show signs of returning to balance and in May 2022, inventory started journey toward recovery, growing gradually compared to the previous year for the first time since June 2019.

Those who buy during the "best week" can expect:

• More than 6% of homes with reduced prices
• Savings of more than $20,000, on average, relative to the summer's peak price of $450,000
• Approximately 46% more homes to choose from vs. the average week to date
• Extra time to make buying decisions, with homes expected to stay on the market 15 days longer than during the summer's peak
• Less competition, as demand during the best week to buy is historically 26.9% lower than the yearly peak week and 8.5% lower than the average week

"After several years of an overheated housing market, higher mortgage rates are helping usher in more regular seasonal trends, which have pros and cons for home shoppers," said Realtor.com Chief Economist Danielle Hale. "If you're flexible on your timing and can budget for higher rates, early fall can be a great time to secure a home, with a number of factors aligning to make it the best time of the year both in terms of price and competition. This is especially true for first-time buyers and others who are not trying to sell a home at the same time as their purchase."

Plentiful Listings

During the best week, buyers can expect listings to rise beyond what they’ve been seeing so far this year. Historically, inventory peaks in early fall. This year, inventory will likely continue to be strong through the best week to buy. The typical seasonal trend expects this week to have 9.5% more active listings than the average week, and 12.9% more than the start of the year. However, 2022 is an outlier compared to past years as it brought about a sizable shift in the market as buyer demand cooled in response to higher mortgage rates. Adjusting for this shift suggests that the last week in September may see up to 46% more active listings than this year’s average so far. If this trend holds, we can expect to see around 780,000 listings on the market during the best week, which is roughly 400,000 more active listings nationwide than the lowest point this year, in late February.

Less Competition From Other Buyers

Home buyers shopping during the best week should expect less competition from other buyers. Pre-pandemic, July was typically the peak for homebuyer demand, as measured by views per property on Realtor.com. The 2021 housing market shifted the peak earlier into the spring, with continued high demand in the summer, as buyers hustled to beat rising prices and mortgage rates. The spring and summer tend to have the highest concentration of shoppers looking at each home for sale, which translates to more competition for buyers looking to purchase a home. Historically, during the Best Week to Buy, demand is 26.9% lower than the peak, and 8.5% lower than the average week, and the advantage for home shoppers is likely to be at least as good this year as high prices and mortgage rates continue to reduce buyer purchasing power.

The benefits of buying during the "best week" include:

Reduced prices: Historically, an average of 5.2% of homes have price reductions during this period. As the market begins to stabilize after a frenzied couple of years, more than 6% of homes may have reduced prices during the best week in 2022. Nationally, this could translate into roughly 48,000 homes available at a decreased cost.

More listings: Although active listing inventory isn't back to pre-pandemic levels, it has increased year over year and year to date. There could be 780,000 listings during the best week, 46% more than this year's average to date.

Less competition: Fierce home buying competition has softened as mortgage rates rise. Historically, demand (as measured by views per property on Realtor.com) during the best week to buy has been 26.9% lower than its July peak and 8.5% lower than the average week of the year.

More time to decide: Homes will stay on the market longer, giving buyers some breathing room to make purchase decisions. During the best time to buy, a typical home is expected to remain on the market for two weeks more than during peak market pace in May and one week more than the average time spent on the market to date.

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. Historically, the early fall has provided an ideal mix of market conditions, including substantial inventory, waning competition, below-peak prices, and a slowing purchase pace.

Is the housing market back to normal?

In a ‘typical’ —or pre-pandemic— year, early-fall brings near-peak inventory, waning demand, a slower market pace, below-peak prices, still considerable new listings, and more homes seeing reduced prices. Last year, the 2021 homebuying season largely behaved like a pre-pandemic year, with higher prices, higher demand and much less inventory. The beginning of 2022 continued the intensity of 2021 but also added in climbing mortgage rates.

In May 2022, the number of homes for sale increased over the previous year for the first time since June 2019. This development signaled a turning point in the market that continued to play out in the following months. As buying continued to get more expensive, some buyers chose to put off a home purchase for the time being, which allowed for inventory to begin its recovery. Despite an increase in inventory and a decrease in demand, prices continued to climb through June before finally leveling off in July as price growth year-over-year slowed.

As summer came to an end, inventory grew, price growth slowed, time on market started to level off, and price reductions climbed —indicating that this year’s homebuying will follow a more typical pattern that may be stronger than usual given the cyclical rebalancing that is also occurring. However, buyers continue to feel the effect of uncertain economic conditions. Potential buyers will face the affordability challenges that have made way for the recent real estate refresh. Despite this, the typical seasonal trend coupled with the already cooling market will play in the favor of persistent, informed buyers who are ready to purchase.

To read the full report, including charts and methodology, click here.