People currently in the market for a house caught a break, at least for a few more weeks, when the Federal Reserve recently decided to keep short-term interest rates at their rock-bottom levels.
The Fed's decision doesn't directly dictate mortgage rates, but there is a correlation between the two. So, 30-year loan rates should remain right around 4 percent until the central bank feels that the economy, both at home and globally, is strong enough to handle higher loan costs without cratering.
But there's another time-sensitive factor favoring active buyers right now: According to new research from RealtyTrac's prolific economics department, October is the month to get the best deal on a house. If you can't pull the trigger this month, December, January and February are also good times to buy.
RealtyTrac, a real estate data firm, analyzed more than 32 million single-family and condominium home sales since 2000, and found that during that span, the 2.7 million buyers who closed on their loans in October netted an average sales price that was 2.6 percent below the average estimated full market value.
Not only that, but the best day of the year to buy, according to the analysis, is Oct. 8. Of the 356 days in the year with sufficient sales data, the best bargains occur on Oct. 8, says RealtyTrac, when the buyers' home purchases are 10.8 percent below estimated market value, on average.
If you miss that date, you should do pretty well -- at least statistically -- if you close a week later, on Oct. 15 (an average of 9.1 percent below market value) or Oct. 22 (9.6 percent). And if you can't move that fast, then Nov. 26, Thanksgiving Day this year, will net a price 10.1 percent below full value, and Dec. 31, New Year's Eve, will result in a sale that's 9.6 percent below market.
Since it's tough to match a contract to a specific closing date, especially when two of the best days are holidays this year, let's take a closer look at the best months to buy.
After October, February is the next best month. Buy in February, and the statistics say you should come away with a deal that's 2.4 percent below the estimated market value of your new place.
July, December and January are all also good months to buy, according to RealtyTrac.
Notice that July is the only summer month on the "best months to buy" list. While conventional wisdom has it that spring and summer are typically the best buying seasons, it turns out that winter takes the prize. Surprise, surprise!
The reason: less competition -- on both the buying and selling sides.
O.B. Jacobi, president of Seattle-based Windermere Real Estate, told RealtyTrac that his agents often advise sellers to take their homes off the market until spring for two reasons: the dreary weather in the winter and the significantly shorter days. Those issues make it a challenge to present homes in their best possible light.
But at the same time, Jacobi said, "we tell our buyers that (winter) can be a very opportune time for them, because sellers who keep their homes on the market through the holidays are often motivated to sell. There also are typically fewer buyers in the marketplace, so there is less competition for homes."
Anthony Rael of RE/MAX Alliance in Denver agreed. "Many buyers who may have spent the past six months competing and coming up short may be rewarded in the fall and winter months, as more inventory should provide them with more choices and, hopefully, less competition," said Rael.
For what it's worth, April is the worst month to buy, but the best month to sell. Over the last 15 years, buyers who closed in April paid an average of 1.2 percent above the estimated market value. But of course, that means sellers netted a 1.2 percent premium.
April, by the way, is the only month of the year when sellers have a net gain.
The best day of the week to close is Monday, followed by Friday. Thursday is the pits, apparently.
Of the 5.5 million sales closed on a Monday over the last 15 years, buyers realized an average discount of 2.3 percent. On Friday, the discount based on the sales over that period was 2 percent. On Wednesday, it's 1.4 percent, and on Tuesday, 1.9 percent. On Thursday, the discount was only 1 percent.
For buyers, the bottom line is this: Get on your horse. RealtyTrac's analysis shows that there are definitely better months and days to buy, and the top five days are coming up -- along with four of the top five months.
Sellers, on the other hand, may want to consider waiting until spring if they want top dollar.