The housing market can be volatile throughout the year, leading many to try and surmise when the best time is to buy a home. Does it make sense to buy a house at the end of the year?
Even though your mind may be on the holiday season, the end of the year may present an opportunity to get the keys for your next home. Here are three reasons why the closing months may be a good time to get on the house buyer’s market.
Less Competition for Fewer Homes on the Market
According to historical data from the Federal Reserve Bank of St. Louis, housing inventory begins to drop in October of each year, coming to a low between December and February. With fewer homes out there, there are less home buyers searching on the market. Factors including holiday travel and school schedules reduce the amount of people actively looking for a home.
Between smaller inventory and less competition, the end of the year could present a good time to purchase a home. A Zillow report shows in 2024, only 24% of buyers paid above a home’s asking price in January, compared to 35% who pay above list price in May and June of the year. This all could translate to more leverage and room for negotiation on home prices, closing costs and other concessions.
Potential Tax Benefits
Buying a home may come with tax benefits which could reduce your tax bill at the end of the year. Mortgage points paid at closing, mortgage payment interest and property taxes may be deductible, depending on where you live and are buying. If you make any of these payments before December 31, it could count towards that tax year’s deductions.
Although these tax benefits are available anytime throughout the year, it could make sense to buy before the end of the year in case those breaks are available to potentially reduce your tax obligations. Before making any decisions, be sure to talk to a tax professional to learn about how a home purchase could affect your individual situation.
More Access to Resources
With the home buying slowdown at the end of the year, you may find resources more available to expedite the process. From home inspectors and appraisers to real estate agents, less activity on the market could work to your advantage.
More resources available can result in completing the sale faster and moving to closing easier. Even though every situation is different, working with a Mortgage Loan Officer can give you a better understanding of the timeline and help you get everything in place to celebrate the holidays in your new home.
SESLOC Credit Union’s Mortgage Loan Officers are experienced in the marketplace and can help you navigate the road to your next home no matter the season. Whether you are looking at the end of the year or your buying target is months away, our team is available as a resource all year long to get you from shopping to closing. Contact us to get started on the right path today.