Home For The Holidays: Will It Be Better To Buy At Thanksgiving Or Christmas?


Holiday home shoppers who are sensitive to mortgage interest rates near 8% may resist the idea of buying before Thanksgiving, hoping that Santa Claus brings relief, but is waiting until Christmas the answer this season?

On Wednesday, the Federal Reserve held its target range for the federal funds rate at 5.25% to 5.5%, and mortgage rates slipped in anticipation of the news. But Orphe Divounguy, senior macroeconomist at Zillow Home Loans, warned that investors will likely recalculate their inflation forecasts based on employment and wage growth data, “causing large swings in mortgage rates.”

That means uncertainty for homebuyers.

Matt Ronne, senior loan officer with Motto Mortgage Preferred Brokers in Athens, TN, said that this year, with the expectation that interest rates may continue to rise, better mortgage rates should be available now through Thanksgiving as opposed to in the month of December.

“If there is any silver lining, updated forecasts have rates leveling off after the next expected .25% hike from the Fed later this year. We’ll have to wait and see if that holds up. Hopefully, it does,” Ronne said.

World and national events have, and will continue to, influence what happens in the United States, Ronne said.

“Overseas conflicts in Ukraine and now the Middle East are two huge outside contributing factors … and we’re going into an election year in 2024,” he said.

But overall, Ronne thinks the market is what it is, and consumers – especially first-time home buyers – will continue to buy homes.

“They don’t know what a 3% mortgage looks like, and for a very long time probably will not see one,” Ronne said of first-time buyers. “But as overall housing prices continue to rise, these individuals will take the long-term security of owning their own house and gradually building equity and wealth in it versus paying a landlord astronomically high rent to put their heads down at night in a lease or rental.”

What does history tell us about holiday home sales?

Joseph Melara, a real estate broker in Palm Desert, California, said that based on the historical mortgage rate data he’s analyzed, it seems that over the past 23 years, November has been the more favorable month in terms of lower mortgage rates compared to December.

“Specifically, November had lower rates 13 times, while December had lower rates only 10 times during this period,” Melara said. “This consistent trend suggests that November is often the better time for more affordable mortgage rates compared to December.”

Looking at the past six years, Melara said there is a consistent pattern of changes in mortgage rates between November and December.

“It’s important to note that these rates can fluctuate due to various economic factors, and predicting with absolute certainty is challenging,” he said. “However, based on recent data, there’s a reasonable expectation that November 2023 may have a lower mortgage rate than December 2023.”

Melara agrees with Ronne that external factors could influence these rates including inflation in the United States and ongoing conflicts such as the wars in Ukraine and Israel.

“These geopolitical and economic events can have ripple effects on financial markets, which, in turn, impact interest rates,” Melara added. “It’s essential to keep an eye on these factors as they may affect mortgage rates in the coming months.”

What about selling a home during the holiday season?

Gary Mintz, a realtor with Berkshire Hathaway, Fox Roach, Realtors in Philadelphia, generally does not think there is a bad time to list homes as there are always buyers. He does, however, discourage his sellers from listing their properties between Thanksgiving and New Year’s.

“That is only the case if they can hold off,” said Mintz. “If not, then I say list it. As far as mortgage rates go, it is very hard if not impossible to predict if the rates will be better around Christmas or Thanksgiving. They have steadied over the last week or so, but nobody really knows if they will go down and be better around Thanksgiving or Christmas.”

Mintz said the rates last year were better but by all indications, they should start to tick down a little.

“The economy is strong and that is resulting paradoxically in higher rates. But the Fed seems to be at the end of their rate increase, and we will hopefully start to see the rates go down. I do not think we will ever see them get into the 3s again. By most accounts, we may see them go into the 5s in the next few years. But again, nobody really knows!” Mintz said.

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