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For Buyers

3 Reasons To Buy a Home Before Spring

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Let’s face it — buying a home can feel like a challenge with today’s mortgage rates. You might even be thinking, “Should I just wait until spring when more homes hit the market and rates might be lower?”

But here’s the thing, no one knows for sure where mortgage rates will go from here, and waiting could mean facing more competition, higher prices, and a lot more stress.

What if buying now — before the spring rush — might actually give you the upper hand? Here are three reasons why that just might be the case.

1. Less Competition from Other Buyers

The winter months tend to be quieter in the real estate market. Fewer people are actively looking for homes, which means you’ll likely face less competition when you make an offer. This makes the process feel less rushed and less stressful.

According to the National Association of Realtors (NAR), homes sit on the market longer in winter compared to spring and summer (see graph below):

a graph of blue and green barsFewer buyers in the market means you’ll likely have more time to make thoughtful decisions. It also means you may have more negotiating power. According to the Alabama Association of Realtors:

A significant benefit of buying a home in winter is the reduced competition. Because of the perceived benefits of spring, many buyers delay the start of their house hunt. As a result, you will find fewer people competing for the same properties during winter. Less demand can translate into more negotiating power as sellers may be more willing to entertain offers or agree to concessions to get a deal closed quickly.”

2. More Negotiating Power

With homes staying on the market longer, sellers may be more willing to negotiate. This can lead to better deals for you as a buyer, whether that means a lower price or added incentives, like sellers covering closing costs or making repairs. As Chen Zhao, an Economist at Redfin, points out:

“. . . buying during the off season means less competition from other buyers. That means potentially negotiating a better deal.

Plus, when demand is lower, sellers often feel more pressure to work with serious buyers. This could give you an edge to negotiate terms that work best for your situation.

3. Lock in Today’s Prices Before They Rise

Historically, home prices tend to be at their lowest point in the winter months, too. According to data from NAR, home prices last year were at their lowest in January, February, and March — right before the spring buying season kicked in (see graph below):

a graph of prices and numbersThis trend isn’t new — Bright MLS shows between 2010 and 2024, home prices in January and February were, on average, 15% lower than during the month of peak home prices (typically June). Buying in the off-season means you’re more likely to avoid paying the premium prices that come with the high demand of spring.

On top of that, home prices generally appreciate over time, meaning they tend to go up year after year. That means if you’re ready to buy and you can make it happen, you’re not only taking advantage of what might be the lowest prices of the year, but you’re also locking in today’s price before it increases in the future.

Bottom Line

While spring may seem like the obvious time to buy, moving before the peak season can give you significant advantages, like less competition, more negotiation power, and lower prices.

If you’re ready to explore your options, a local real estate agent is there to help.

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First-Time Buyers

Townhomes: A Smart Solution for Today’s First-Time Buyers

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Buying your first home in today’s market can feel tough. Between high home prices and mortgage rates, affordability is still a big challenge. And some buyers are making one simple trade-off that’s getting them in the door faster: square footage.

According to the National Association of Home Builders (NAHB), 35% of buyers are willing to purchase something smaller to make homeownership happen. And one place you can usually find a smaller footprint (and sometimes better affordability) is in townhomes.

Why Townhomes Are Gaining Popularity

Townhomes typically cost less than single-family homes due to their more limited size. And that’s a big plus for today’s budget-conscious buyer. As Realtor.com says:

“In today’s market, affordability remains a key priority for homebuyers, making townhomes an attractive option because they are often priced more reasonably than single-family homes. It makes them especially appealing to first-time homebuyers on a tighter budget . . .”

So, if you’re trying to buy but feeling stuck because of rising prices, shifting your focus to townhomes could be one way to get into homeownership without maxing out your budget.

Builders Are Responding to the Demand

Builders have seen buyers’ appetite shift to smaller homes, and they’re adjusting to meet the demand. As Joel Berner, Senior Economist at Realtor.com, explains:

“Builders are making a concerted effort to provide smaller, more affordable inventory to the market in a way that the existing-home market cannot. Townhomes are a significant portion of that effort.”

And the numbers back it up. According to data from Realtor.com, townhomes now make up a bigger share of new construction listings than they did just a couple of years ago (see graph below):

a graph of a growing graphThat means, if you’re interested in this type of house, you have more choices than you would have had over the last few years. And more options that are potentially more affordable are definitely a good thing. It should make your search for your first home a bit easier.

Is a Townhome Right for You?

If you’ve been focused only on more traditional homes with their own yards, an agent can help you explore whether a townhome could work for you. Who knows, you may find out you love the lifestyle. A lot of people do. As an article from the National Association of Realtors (NAR) explains:

“Townhomes tend to cost less than single-family detached homes and can be appealing to young professionals who may desire medium-density, walkable neighborhoods.”

That’s because they’re lower maintenance, they can provide a sense of community with other residents, and they have their own unique amenities. Not to mention, they give you the chance to start building wealth through homeownership without the upkeep that comes with having your own detached, single-family home. And that can be great for first-time buyers who are a bit worried about the maintenance anyway.

But they also come with some other considerations, like dealing with noise through shared walls. If you’re a renter right now, maybe you’re used to that already. But these are the types of things you’ll want to think about. And that’s where an agent’s expertise comes in. They’ll help you weigh the pros and cons, so you understand how a townhome fits into your lifestyle and long-term goals before making your decision.

Bottom Line

If you’re struggling to find a home within your budget, it may be time to expand your search and consider options you haven’t before, like townhomes. Sometimes, compromising a little bit on space is worth it to get your foot in the door.

What matters most to you — space, location, or budget? Connect with an agent to figure out where you can flex to make homeownership happen.

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For Buyers

Here’s What a Recession Could Mean for the Housing Market

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Recession talk is all over the news, and the odds of a recession are rising this year. And that leaves people wondering what would happen to the housing market if we do go into a recession.

Let’s take a look at some historical data to show what’s happened in housing for each recession going all the way back to the 1980s.

A Recession Doesn’t Mean Home Prices Will Fall

Many people think that if a recession hits, home prices will fall like they did in 2008. But that was an exception, not the rule. It was the only time we saw such a steep drop in prices. And it hasn’t happened since.

In fact, according to data from CoreLogic, in four of the last six recessions, home prices actually went up (see graph below):

a graph of a graph showing the price of falling pricesSo, if you’re thinking about buying or selling a home, don’t assume a recession will lead to a crash in home prices. The data simply doesn’t support that idea. Instead, home prices usually follow whatever trajectory they’re already on. And right now, nationally, home prices are still rising at a more normal pace.

Mortgage Rates Typically Decline During Recessions

While home prices tend to stay on their current path, mortgage rates usually drop during economic slowdowns. Again, looking at data from the last six recessions, mortgage rates fell each time (see graph below):

a graph of a graph showing the rise of mortgage ratesSo, a recession means mortgage rates could decline based on the data. While that would help with affordability, don’t expect the return of a 3% rate.

Bottom Line

The answer to the recession question is still unknown, but the odds have gone up. But that doesn’t mean you have to wonder about the impact on the housing market – historical data tells us what usually happens.

When you hear talk about a possible recession, what concerns or questions come to mind about buying or selling a home?

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For Buyers

Paused Your Moving Plans? Here’s Why It Might Be Time To Hit Play Again

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Last year, 70% of buyers abandoned their home search – and maybe you were one of them. It makes sense. Inventory was low, prices were high, and mortgage rates were up and down like a rollercoaster. All of that made it really hard to find a home you loved – and could afford.

But guess what? The market is shifting.

So, if you paused your moving plans in 2024, it might be time to hit play again. Here’s why.

More Inventory Opens Up More Options

Even if you could make the numbers work, the lack of available homes in recent years probably made it hard to come by something that fit your needs. But inventory is rising, which means you have more options now.

According to Realtor.com, inventory has jumped 27.5% since this time last year (see graph below):

a graph showing the average of a home saleSo, if you were reluctant to list your house because you weren’t sure where you’d go if it sold, you have more choices than you did a year ago. That’s a big win.

Homes Are Staying on the Market Longer, Too

When the supply of homes for sale is low, they’re snatched up quickly because there just aren’t enough of them to go around. And a few years ago, that meant your house could sell overnight. While that’s not always a bad thing, if you’re planning a move and also need to find your next home, a slower pace isn’t the end of the world. In fact, it’s welcome relief.

Now that inventory has grown, homes are staying on the market longer, meaning you don’t have to feel as rushed in the process (see graph below):

a graph of blue barsThe latest data shows the typical time homes spent on the market went up by about 8% this year – that’s higher than we’ve seen since 2020, but still a faster pace than before the market ramped up. And it’s about a week longer than last year. Talk about a sweet spot for movers. It may seem like just a few days, but it gives you more flexibility and time to be thoughtful about your decisions. As Hannah Jones, Senior Economic Research Analyst at Realtor.com, notes:

“There are more homes for sale than in the last few years, which means the market pace is a bit more manageable–with longer days on market–and many sellers are more flexible . . . Though buyers face still-high housing costs, they may find a bit more give in the market, which could give them more time to make a decision, even in the busy spring and summer months.”

And if you’re thinking – but wait – doesn’t that mean it will be harder to sell my house? Don’t worry. With inventory still almost 23% below the pre-pandemic norm, well-priced homes are selling, especially as more buyers step back into the game this season.

Bottom Line

With growing inventory, sellers who want to upgrade, downsize, or relocate have more choices. Plus, with less pressure to rush into an offer, it could be a great time to revisit your home search if you put it on hold.

With more homes on the market and more time to make decisions, what else do you need to see in order to kickstart your home search again?

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The information contained, and the opinions expressed, in these article are not intended to be construed as investment advice. Let's Talk Real Estate, Mark Sincavage, Landshark Mark, LLC and Keeping Current Matters, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Let's Talk Real Estate, Mark Sincavage and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.