Though many believe spring is the optimum time for home buying, a report [1] by Trulia [2] said starter-home buyers should think again.
According to the report, starter home inventory increases by approximately 7 percent in the fall months compared to the spring, which leads to listing prices that are about 4.8 percent to 3.1 percent lower in the winter and spring than in the summer, respectively.
Trulia found that 70 of the largest 100 metros experienced peak annual starter home inventory between October and December, based on their Inventory and Price Watch data from 2012 to 2017. It also found that listing prices of starter homes dip between January and March annually as a result of the spike in inventory that happens at the end of each year.
“Nationally, the number of starter and trade-up homes on the market has decreased substantially, falling 20.4 percent and 12.5 percent respectively, during the past year, while inventory of premium homes has fallen just 2.3 percent,” Trulia reported.
The share of starter homes dropped to 20.5 percent from 23 percent year-over-year and homebuyers will have to spend 2.3 percent more of their income in 2017 than they did in 2016.
Trulia reported that inventory is at the lowest it has recorded since they began keeping track in 2012, but starter homebuyers should be able to find consolation at the end of the year.
“That seasonal spike in inventory also tends be followed by lower listing prices at the beginning of the year,” Trulia reported. “As a result, fall and winter is prime hunting time for starter homebuyers to think about trying to bag that all elusive starter home, rather than packing it in for the season.”
To see the full report, including regional data, click here [1].