The direction of home prices used to be easy to forecast. Low mortgage rates and homeowner mobility triggered by the work-from-home movement sent prices higher for the better part of two years. Buyers had to dodge offers above home asking prices and multiple bids on the same home. The housing market has cooled as mortgage rates have jumped and a recession has set in. The recent challenge is when to get a good deal in a home market when price increases have decelerated. A new study claims that it is this month, October.
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The period when 30-year fixed rate mortgages were available for 3% allowed people to buy homes that used to be beyond their budgets. People could move and “get more house” than they used to.
The COVID-19 pandemic shuttered almost every business in the country starting in March 2020. People were sent home to work. Many have not returned, and some never will. Some Americans could move to places they found attractive, often outside big, expensive cities.
The recent October Is the Time to Buy for Homebuyers report by real estate research firm ATTOM is based on an analysis of historical data. The authors concluded that “buyers who close in October will get the best deal compared to the spring buying season.”
ATTOM looked at sales from 2013 to 2021 by day. It compared prices for actual closings to its automated valuation models (AMV) (whatever that is).
The median price for home sales that closed in October was 3.3.% above AMV. The median sales price in October was $222,004, compared to the AMV of $215,000. The two months at the end of the calendar year also gave buyers an advantage. The price over AMV in November was 3.7%, with the actual median sales price at 225,000. The price over AMV in December was also 3.7%, with an actual sales price of $225,000. (That two months have the same median dollar price for a home sale is odd.)
The analysis shows the buyer’s price advantage worsens in the spring.
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