5 Good Reasons to Shop for a Home in December

While many Americans spend the time between Thanksgiving and Christmas with visions of sugar plums dancing in their heads, there are others who focus on getting a good deal on a new home. After all, winter represents the bottom of the real estate market, and December might the low point of the winter.

Home prices may vary by as much as 5% to 7% over the course of a year, and the very best time of year to get the lowest price on a house is October. On January 19, home prices command a 9.6% premium to their market value, making it the worst single day of the year to buy a house. On average, home prices are highest in April. 

While price is not a major reason to buy a new home in December, one other reason you might choose to forgo house shopping: limited selection. There are, however, some reasons for looking for a new home that are pretty compelling. Here are five of them.

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Less competition. As we said earlier, most Americans are thinking about gifts and family and holiday feasting, and they don’t have time to look for a new home.

End-of-year tax benefits. If you can close the sale before the end of the year, you can deduct some of the closing costs from that year’s taxes.

Sellers are getting desperate. Would you want to sell a home during the holiday season unless you absolutely had to? We didn’t think so. And nobody else wants to do it either, so the seller is, as they say, “really motivated.”

See the house, not the landscaping. In most parts of the country a winter landscape includes bare trees, brown lawns and piles of snow. Your judgment is less likely to be clouded by swarms of flowers and greenery by than the actual look of the house. Also, when you get into the house you get some idea of how well insulated it is and how well the furnace works, not insignificant insights into how much it will cost to live there.

Low mortgage rates. While rates have been rising since the election as bondholders sell their bonds and low demand means bonds have to offer higher interest rates in order to attract buyers, mortgage rates are still very low at around 4%. The Federal Reserve is expected to raise its policy rate by a quarter point later this month, and that will show up in mortgage rates almost instantly.

For some added insights and commentary, see Money Talks News. 

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