SEPTEMBER 14, 2022
The Best Week offers a balanced mix of market conditions that favor buyers.
The 2022 homebuying season has realigned with pre-pandemic seasonal patterns, and a shifting market offers buyers more flexibility than recent years, depending on their priorities.
Nationally, the best time to buy a home is the week of September 25 – October 1.
Though it is not back to pre-pandemic levels, active listing inventory has recovered significantly both year-over-year and compared to the beginning of the year so far in 2022. Adjusting for both the seasonal and 2022-specific market shift, the last week in September may see up to 46% more active listings than this year’s average so far. Buyers are poised to save over $20,000 during this week compared to the summer peak for a median priced home of $450,000.
Buying after the peak week may net a buyer more savings, but buying earlier is likely to mean more fresh options to choose from. Thinking about your priorities as a buyer can help you decide when to start shopping
Since the start of the pandemic, homes have been in high demand leading to intense competition, rapidly depleting inventory, soaring prices and a breakneck market pace. Buyers flocked to areas that offered spacious homes, desirable outdoor amenities and more bang for their buck. Over the last year, the median US home price climbed 16.9% year-over-year to a record-high $450,000 in June, and rental prices offered no relief, setting new records nationwide. High prices, climbing mortgage rates and inflation reaching near-historic levels put a dent in potential buyers’ pocketbooks. As a result, the market finally started to show signs of returning to balance and in May 2022, inventory started the trek towards recovery, growing compared to the previous year for the first time since June 2019.
The last few months have signaled that relief may be on the horizon for buyers, especially as the season quickly approaches the best time to buy — the time of year when the balance of market conditions tends to favor buyers the most. According to our analysis of Realtor.com listing data since 2018, the best time to buy a home this year will be the week of September 25th – October 1st.
With all of the challenges facing buyers as the housing market continues its journey to a healthy condition, this week boasts the culmination of market factors that favor buying over every other week of the year.
Is the housing market back to normal?
In a ‘typical’ (pre-pandemic) year, early-fall brings near-peak inventory, waning demand, a slower market pace, below-peak prices, still considerable new listings, and more homes seeing reduced prices. Last year, the 2021 homebuying season largely behaved like a pre-pandemic year, albeit with higher prices, higher demand and much less inventory. The beginning of 2022 continued the intensity of 2021 but also added in climbing mortgage rates. In May 2022, the number of homes for sale increased over the previous year for the first time since June 2019. This development signaled a turning point in the market that continued to play out in the following months. As buying continued to get more expensive, some buyers chose to put off a home purchase for the time being, which allowed for inventory to begin its recovery. Despite an increase in inventory and a decrease in demand, prices continued to climb through June before finally leveling off in July as price growth year-over-year slowed.
As summer faded, inventory grew, price growth slowed, time on market started to level off, and price reductions climbed, indicating that this year’s homebuying will follow a more typical pattern that may be stronger than usual given the cyclical rebalancing that is also occurring. However, buyers continue to feel the effect of uncertain economic conditions. Potential buyers will face the affordability challenges that have made way for the recent real estate refresh. Despite this, the typical seasonal trend coupled with the already cooling market will play in the favor of persistent, informed buyers who are ready to purchase.
The Year So Far
Up until the last couple months, 2022 continued to crank it up a notch with record-high listing prices and a blistering pace of home sale. However, as of August, the national median time on market for a home was 42 days, slowing from 37 days last year and this year’s peak speed of 31 days in May. After a whirlwind couple of years, time on market has started to level off and even slow compared to last year. However, inventory has kept up the pace in affordable areas, such as many of this year’s hottest zip codes, where the typical home sells within a little over a week of going on the market.
Extreme inventory shortages carried over from 2021 and continued through the start of the year, forcing buyers to scramble during their home search. At its lowest point, housing inventory was down 29.1% compared to last year and down more than 65% compared to 2019. As inflation concerns mounted, the Fed raised interest rates, and mortgage rates climbed. The continued high prices combined with elevated mortgage rates took a toll on buyers’ budgets, leading to fewer buyers which freed up inventory at the same time that more homeowners decided to list homes for sale this spring. By the end of August, active listings were up 87.3% compared to the start of the year. Moreover, despite falling below year-ago levels in summer, new listings continue to enter the market, with over 100,000 new listings every week since late February.
As discussed above, the major factor keeping inventory high is the mortgage rate trend. Last year, buyers were able to keep up with rising prices by taking advantage of low mortgage rates. Now that rates have climbed, reaching more than 200 basis points higher than the previous year since late April, some buyers are no longer able to keep up. As a result, fewer buyers in the market means more active inventory. On the other hand, many sellers fear they have missed out on the peak, leading to a recent decline in new listings as some sellers hold off to see how the market will settle.
Why the End of September?
Nationally, the best time to buy in 2022 is the week of September 25-October 1. This week historically has shown the best balance of market conditions that favor buyers. Inventory tends to be high, prices are below peak levels, demand is waning, and pace of the market slows to a more manageable speed.
This seasonal slowdown is partly driven by school schedules and weather patterns. Housing market activity begins in earnest in spring and peaks in summer as families hoping to move while kids are out of class look to close on a home with enough time to settle in before the back to school rush. This critical mass of families prioritizing home search decisions around school districts and the school calendar combined with warmer weather that makes home showings and inspections easier to conduct and foliage that enhance the curb appeal of many homes leads to a predictable surge in activity. Then as the year transitions to fall and more families bow out due to the school schedule, demand wanes, and prices dip to post-peak levels as leftover inventory stays on the market.
Early fall is generally the sweet spot for buyers who can capitalize on that confluence of factors to have a wider variety of options at a more reasonable price.
During the best week, buyers can expect listings to rise beyond what they’ve been seeing so far this year. Historically, inventory peaks in early fall. This year, inventory will likely continue to be strong through the best week to buy. The typical seasonal trend expects this week to have 9.5% more active listings than the average week, and 12.9% more than the start of the year. However, 2022 is an outlier compared to past years as it brought about a sizable shift in the market as buyer demand cooled in response to higher mortgage rates. Adjusting for this shift suggests that the last week in September may see up to 46% more active listings than this year’s average so far. If this trend holds, we can expect to see around 780,000 listings on the market during the best week, which is roughly 400,000 more active listings nationwide than the lowest point this year, in late February.
Less Competition From Other Buyers
Home buyers shopping during the best week should expect less competition from other buyers. Pre-pandemic, July was typically the peak for homebuyer demand, as measured by views per property on Realtor.com. The 2021 housing market shifted the peak earlier into the spring, with continued high demand in the summer, as buyers hustled to beat rising prices and mortgage rates. The spring and summer tend to have the highest concentration of shoppers looking at each home for sale, which translates to more competition for buyers looking to lock down a home. Historically, during the Best Week to Buy, demand is 26.9% lower than the peak, and 8.5% lower than the average week, and the advantage for home shoppers is likely to be at least as good this year as high prices and mortgage rates continue to reduce buyer purchasing power.
A More Manageable Market Pace
Another challenging aspect of homebuying, especially in 2021 and into 2022, is the pace of the market, or how long it takes homes to sell. This year saw time on market build on last year’s already blistering pace all the way up until August. This means buyers continue to feel pressure to potentially buy a home sight unseen, or make more concessions to close a deal before more competition can chime in.
The best week should offer some relief to those who need a bit more time to make their decision. The best week historically slowed by 21.1% compared to the peak pace earlier in the year. With a peak market pace of just 31 days in May, based on seasonal trends and a cooling market, the Best Week is expected to add about a week to the amount of time a typical home spent on market so far this year, and more than two weeks more time on market than the peak this May.
Lower Post-Peak Home Prices
As the market has continued to cool, prices have been surprisingly sticky, continuing to climb year-on-year, though slowing the pace of growth. At a national level, prices typically dip 2.1% compared to the typical season high during this week. However, prices have been falling more quickly than a typical year since July. Adjusting for this year’s trends, buyers shopping during the best week could save close to $20,000 compared to the year’s peak. And in several of the largest housing markets around the country, home prices during the best week can dip over 10% lower than their peak price earlier in the year, potentially saving buyers tens of thousands of dollars.
More Price Reductions
The best week also represents one of the peak weeks for price reductions throughout the year, with an average of 5.2% of homes seeing price reductions that week, historically. Due to the recent shift in the market, however, 2022 is seeing price reductions return to pre-pandemic levels, suggesting the Best Week may see more than 6.0% of homes with reduced prices. Nationally, this could mean roughly 48,000 homes seeing price reductions this week, based on inventory estimates. This weekly price reduction rate would translate to a monthly price reduced share of about 24.8%. This peak is historically driven by a combination of buyers leaving the market, which brings down demand, in addition to a build up of inventory throughout the year. This year, the number of buyers leaving the market is much higher than in the past few years, meaning even more sellers may reduce their home price to draw buyer attention.
Though new homes continue to enter the market, they add to the already-increasing back-stock of homes that haven’t yet sold at that point in the year. This means more competition among sellers for the dwindling number of buyers, which leads to price reductions for sellers hoping to sell before year-end. Importantly, many sellers are buyers themselves, nearly three-quarters according to a recent survey, and are motivated by many of the similar seasonal milestones like the school calendar.
The Potential for More Fresh Listings
In addition to active inventory on the market, the addition of fresh listings entering the market tends to give buyers more options even into the fall. The best week historically has added 4.2% more listings than the average week and 24.5% more than the start of the year, however this is another metric that may not behave in typical fashion in 2022. According to the most recent Realtor.com data, the first half of 2022 far surpassed this expectation. As sellers increasingly took the opportunity to cash in on the red hot market, new listings nearly doubled over the beginning of the year by mid-June. However, as affordability challenges have ushered in a cooling market, waning seller enthusiasm led to a drop off in new listings in August. Even so, the number of fresh listings coming on the market has exceeded 100,000 new listings to the market for the last 6 months.
This recent trend is signaling a decline in new listings through the latter half of the year as sellers perceive a tempering market, though the Best Week will still offer buyers considerable new options.
Finding the Best Time to Buy
Price and availability (i.e. inventory) tend to be highlights of things a buyer will keep in mind during their home search. Are there homes they want and can afford?
But there are a few other metrics that they may not be aware of that we at Realtor.com have insight into. Things like competition from other buyers, the pace of the market, and the number of price reductions in the area. All factors that play a part in locking down the right home at the right time.
To determine the best time to buy, we examine multiple housing market metrics. These include: 1) listing prices, 2) inventory levels, 3) new “fresh” listings, 4) time on market, 5) homebuyer demand (realtor.com listing views), and 6) price reductions.
We score each week of the year from 0-100 based on the number of active listings. A given week will score highly if it has more listings compared to other weeks of the year. We score the other metrics in the same way, so each week has six different scores for active listings, new listings, listing prices, days on market, price reductions, and views per property. (In the case of prices, lower prices score higher. Same with views per property).
We then rank each week by the average of those scores. The week with the highest overall score is the best time to buy. This week represents a balanced view of market conditions favorable for buyers.
Plan for Your Priorities
It’s no secret that climbing mortgage rates have made homebuying more challenging, even as price growth has slowed. Mortgage rates have been on a rollercoaster over the past few months as interest rate hikes and inflation data battle it out with a strong job market and healthy consumer spending. As a result, there is a fairly wide margin of error around any mortgage rate predictions for the rest of the year. What we do know is the Federal Reserve is committed to bringing inflation down to a healthy level (2%), so will likely continue the tightening cycle of raising interest rates, keeping upward pressure on mortgage rates.
How should this factor into your homebuying decision? Knowing your priorities can help you navigate any uncertainty. The best time to buy optimizes a variety of factors to choose the best overall week to buy a home. However, if price is your chief priority or if you’re laser-focused on having the largest number of fresh home options, your best time to buy may be slightly earlier or later.
If low home prices are your chief priority, consider waiting until a bit later into the fall, as home prices tend to come down as the holidays approach. In this case, keep an eye on mortgage rates to be sure your patience pays off and higher mortgage rates don’t sabotage your plan for a lower monthly payment. You might consider rate-proofing your home purchase budget by using a mortgage calculator like you’ll find on Realtor.com to consider what changes in the mortgage rate mean for your monthly housing costs, so you’re not surprised.
If instead you are looking to have the maximum number of options, consider buying a bit earlier as new and active listings tend to peak a bit earlier in the fall. Early buyers are likely to have the highest number of fresh homes to choose from, maximizing their potential to find just what they’re looking for, even if they pay a slight premium for buying a bit earlier.
No matter your priority, get to know your local market by spending time looking at your desired area on Realtor.com and setting up price alerts so you are notified of every home that fits your criteria when it hits the market. And keep in mind that homebuying is a journey.
Local Market Sweet Spots
Although nationally the best time to buy is the week of September 25 – October 1, some of the largest housing markets in the country have their local best time just around the corner.
The week of September 11-17 is the best time to buy for New York, Los Angeles, Chicago, Seattle and Minneapolis metropolitan areas, among others.
Housing Markets Where the Best Time to Buy is Sept 11-17
Within the 50 largest metros, markets where the best time to buy in September 11-17 made up 12.7% of the national inventory in August. Among those markets, the week of September 11-17 has historically had an average of 15.7% more listings on the market over the typical week of the year. Competition with other buyers, as measured by views per property, has historically been down 10.9% in these markets, and this year’s trend will likely see an even larger drop in demand. The time on market has been up 42.4% over the year’s fastest pace in the past. On average, listing prices are 5.6% lower during this week compared to the peak prices in these areas at other times of the year. New listings in these areas are typically up 3.4% compared to the average week.
Each of these strike a different balance of market factors during this week as it relates to buyers.
In Seattle, the week of September 11-17 typically has 32.0% more active listings than the average week in the year. In tandem with higher inventory is lower demand, with views per property down 17.3% during this week compared to the peak earlier in the year. That means significantly less competition from other homebuyers compared to the average week. The added inventory spreads buyers out and eases the intense competition per home.
In New York and Los Angeles, homes on the market during this time take 30.3% longer to sell, on average, compared to their respective seasonal peaks when homes sell fastest. Buyers who feel intimidated or frustrated by the blistering pace of sales earlier this year may find the market more approachable as autumn approaches.
Across these markets, listing prices have been 5.6% below their seasonal peaks, on average. Minneapolis sees the biggest drops, 9.9% below peak prices. With the peak price in Minneapolis reaching $422,000 in May, that would translate to a savings of $41,800 during the best week.
Realtor.com analyzed six supply and demand metrics at a national and metropolitan level that follow seasonal patterns, using data for 2018-2021 period (2020 data was omitted due to anomalies caused by the pandemic). Those metrics analyzed include: 1) listing prices, 2) inventory levels, 3) new “fresh” listings, 4) time on market, 5) homebuyer demand (realtor.com views per property) and 6) price reductions. Interest rates, which do not follow seasonal patterns, were not included. To account for 2022 market conditions, estimates reflect typical seasonal patterns layered on top of the most recent 2022 weekly data.
Each week of the year was scored from 0 to 100 based on the number of active listings. A given week scored highly if it had more listings compared to other weeks of the year. The other metrics were scored in the same way, such that each week had six different scores for active listings, new listings, listing prices, days on market, price reductions, and views per property. (In the case of prices, lower prices score higher. Same with views per property).
Each week was then ranked by the average of those scores. The week with the highest composite score was considered the best time to buy. This week represents a balanced view of market conditions favorable for buyers.