Is This the Season for Homebuying?

According to a recent report from NerdWallet, Q1 may prove to be a successful period for lenders, even despite rising mortgage rates.

According to the report’s writers Daniel Tonkovich and Emily Starbuck Crone, early 2017 is primed to be a good time for buyers and, as a result, for mortgage lenders ready to serve them.

“While winter homebuyers generally encounter a lower inventory,” Tonkovich and Crone wrote, “a September 2016 NerdWallet study found that they have the advantage of less competition. Additionally, the study showed that home prices in January are typically the lowest they’ll be all year.”

NerdWallet analyzed two years of Realtor.com data for 50 of the nation’s most populated metros. It found home sales prices were 8.45 percent lower in January and February than in the more popular buying months of June, July, and August.

Add in the expected rise in interest rates, and buyers may be even more motivated to buy early.

“After hitting historic lows, mortgage rates started rising in fall 2016” Tonkovich and Crone wrote. “This year, economists expect additional rate increases, which means higher monthly payments for future homeowners.”

According to Realtor.com Chief Economist Jonathan Smoke, a better-than-average fall 2016 market also lends itself to lower prices than normal in the coming months.

““[Home] prices are likely to increase even more than you typically see in spring because of low levels of inventory and because we didn’t see the normal weakness we see in fall,” Smoke said.

Smoke said the inventory-to-sales ratio should also make winter a great time to buy–especially when compared to the summer season.

“You basically face almost half of the competition with almost the same amount of inventory in the market,” Smoke said. “This potentially means fewer homes with multiple bidders and more room for negotiating with sellers.

NerdWallet’s analysis backed this up, too. In January 2015 and 2016, actual sales price came in at around $7,000 less than the initial listing price, indicating more negotiating and more flexibility on the part of sellers.