According to Zillow’s 2018 Consumer Housing Trends Report, today’s buyer spends an average of four and a half months looking for a home before making an offer. That's nearly half a year searching for the perfect home! And while 58 percent of those who are successful in making an offer close on their first one, a quarter of buyers make two offers, and 17 percent make three or more.
So what’s the secret to finding the right house and how soon should you start your search? That all depends on whether you're looking for more selection or more bargains.
The Best Time of Year to Buy a House
The highest number of newly-listed homes is during spring, making it peak season for both shoppers and sellers. April and May are the best months to buy a house as it's the time when those looking to lock down their dream home have the largest selection to choose from.
As for sellers, the best time of year to sell a house is the first two weeks in May. Amanda Pendleton, Zillow lifestyle expert, calls this the “magic window.” Not only is the market more competitive at this time, but homes also sell faster and for almost $1,600 more than the average listing throughout the year, according to Zillow research. The selection remains strong through the end of summer, and you’ll begin to see more bargains around July through September—this is the perfect time for patient buyers looking to get the best of both.
As you move into fall and winter, the number of listings decreases dramatically, proving weather to be a key factor for timing when to buy a house. While buyers in warmer states such as California, Arizona, and Texas are less prone to the hassles of a cold-weather move, they generally still see fewer listings. “A con of winter is that it’s outside of the normal shopping season and so the house is either leftover from the previous shopping season, there might be something less attractive about it, or the pricing isn’t right,” says Pendleton.
On the other hand, fall and winter markets are less competitive. Plus, sellers listing in the off-season might be more motivated to cut a deal, especially if they’re relocating for a job and are looking to sell as soon as possible. “The perfect match is hard to find,” says Pendleton. “If you find it, it’s probably the best time to nail down that home.”
How to Know You’re Ready to Buy a House
When is a good time to buy a house in life? According to Zillow research, the median age of a first-time home buyer across the country is 34. The top three major reasons for moving are marriage, separation or divorce, and childbirth or adoption. “Six out of 10 movers who experienced at least one life event that changed their circumstances say their decision to move was directly related to the event,” says Pendleton.
Millennial Home Buyers
As younger millennials continue to delay adult landmarks such as getting married and having kids, the median age of a first-time home buyer has increased. Skylar Olsen, Director of Economic Research at Zillow, attributes this postponement in home-buying to millennials receiving more education than previous generations. Plus, many are taking on more student debt, which can make it difficult to save amidst rising rent prices.
That’s not to say that millennials don’t want to buy a house, however. Zillow research shows that 14.3 million millennials nationwide (21.9 percent of people ages 23-37) still live with their parents as a way to relieve rent burden and save for a down payment. That’s up from 12.7 percent in 2000. Potential young buyers and their parents might choose to forego some personal freedoms for higher savings potential and more financial responsibility.
The majority of millennials (79 percent) who do rent housing are faced with a different dilemma, especially those in more urban, metro areas, says Pendleton. They must decide between access to coffee shops, restaurants, and grocery stores, or heading away from the city center to upsize and find something more affordable. This poses the question, “Can you afford a home with enough bedrooms or do you want to make a price tradeoff and move further away but now you have to drive to pick up milk or go to a restaurant?” says Pendleton.
Saving Is a Must
Whether you're a millennial home buyer or otherwise, good things come to those who save. According to Pendleton, buying a home is one of the best ways to build wealth and a nest egg for the future. “Putting housing money toward an appreciating asset, as opposed to paying a landlord rent, is often a smart investment if you plan to own the home for more than a few years," she says. "If you can afford it, the earlier you can make that investment, the longer you have to build equity for yourself.”
That’s exactly why those ready to buy a home shouldn’t hold back. “Purchasing a home early, and prior to marriage shows confidence, stability, and security in the person who decided to purchase a home,” says Peggy Roege, a broker associate with Better Homes and Gardens® Real Estate.
What to Expect for Future Home-Buying Seasons
According to Zillow research, the average home value is $226,700, up 6.6 percent from a year ago, yet values are growing at the slowest pace since August 2016. “Some of the hottest markets that lead the way in home value appreciation last year, like San Jose and Seattle, are now seeing growth well below the national average,” says Pendleton.
Why the slowdown? "We’re seeing that demand pull back and home values stabilize and flatline, which tells me we’re going to go through a cooling period for 2019," says Olsen. "Things are still looking good for the housing market over time. We’re just looking at a softening to correct for prices that were a bit too exuberant over the past few years.”
As price cuts become more frequent, homes are taking longer to sell, suggests Pendleton. This is good news for buyers who shopped last year and weren’t able to find the right match. Lingering listings mean buyers can make a calmer decision—after all, it’s one of the biggest life purchases you’ll make.
Top Tips for Buying a Home
Now that you're ready to buy or sell a home, there are a few things you can do to help the process go smoother. Pendleton shares her top tips for home buyers and sellers.
Prioritize Your Financing
The first step in house hunting? Prioritizing your financing. “Being pre-approved for a home loan means shoppers can make a competitive offer as soon as they find their dream home,” says Pendleton.
Reevaluate Your Must-Have List
“Make a list of your requirements, and what you’d like but are willing to compromise on—things like size, outdoor space, and commute time,” says Pendleton. Zillow data shows that nearly 60 percent of buyers who stayed within their budget compromised on their home purchase to do so.
Avoid Big Life Changes
"Would-be homebuyers should think twice before changing jobs or making large purchases while shopping for a home,” says Pendleton. “That can raise red flags to a mortgage lender and cause hurdles when qualifying for a home loan.”
Top Tips Selling Your Home
Highlight Top Features
“Highlighting desirable features in your listing description can help your home sell for a premium,” says Pendleton. “Listings mentioning high-end kitchen finishes like steam ovens and professional appliances sold for a more than 30 percent premium, suggesting that these types of features are found in homes that have many desirable amenities.” Check out these top 10 features that make your home sell faster.
Provide a Virtual Tour
Online resources and apps are finding creative ways to cater to modern home shoppers. “Zillow’s new 3D Home mobile platform makes it simple to grab your smartphone and quickly add a free three-dimensional tour to any listing, giving buyers an authentic sense of your home,” says Pendleton. But first: check out our must-have tips for staging your home to sell.
Amp Up Your Appeal
“In a slower market, it's even more important to tackle a few improvement projects to make a home more appealing to buyers,” says Pendleton. “But be prepared—the most common home prep projects, which are a fresh coat of paint or spruced up landscaping, can cost thousands of dollars for professional work.” See what else is on buyers’ hot lists.