We have come to that time of the year when sellers are motivated and pricing is accurate. The new mantra is not location anymore, timing is gold too! It shows that October is the best month to close when you purchase a home.
Why so? Buyers get an average 2.6% discount below the assessed market value. Indeed, October is right between the selling season and the high winter season. Not only is there a seasonal price discount but sellers are willing to negotiate, interest rates might rise, we get tax perks and the change in climate might cause system’s issue.
Homes prices tend to drop at that time of the year because sellers whose homes have been listed for several months are more and more willing to sell. Buyers then have the upper hand when it comes to negotiating deals. Families with children try to avoid buying in fall as kids are already settled into school. Basically, the after-summer-season sounds like the perfect time to rush signing contracts and get the best deals before the high season truly arrives.
As people start fearing a rise in interest rates, buying sooner seems like a better option or it would be less affordable to purchase. Make a move before interest rates hit you if you have already saved up to cover the closing costs and a potential down payment. Indeed, the lower the rate, the more you can purchase. Even if the 30-year fixed mortgage rate has been one of the lowest ever, the FED will meet again this month, so watch out.
Because the tax code acts as an incentive for home ownership –i.e. the benefits are more important at the beginning of the mortgage as interest can still be deducted by then. If you want to optimize taxes, either pick the itemized or standard deduction. In the former case, add up your mortgage insurance premium, tax payments and home interests, along with valid housing deductions. If you are a married couple filing together, it is $12,600, whereas it would be $6,300 separately.
The temperature drop can be a real factor too, as draftiness can become more easily noticeable. It’s the perfect timing for a smart reliable inspection and accurately assess the value of a property.
Buy in October and be ready for the winter holidays, all settled in your newly-decorated home!