January Is the Best Month to Buy a Home: What the LendingTree Study Reveals About Saving Thousands
Timing Is Everything in Real Estate
Buying a home is one of the most significant financial decisions you’ll ever make. But did you know that when you buy can impact how much you pay? According to a recent LendingTree study, the cheapest month to buy a home is January, when home prices drop to their lowest median cost per square foot.
The research, which analyzed national property data from 2015 through 2024, found that homes purchased in January were significantly cheaper than those bought during peak months like May or June. That timing difference could translate to tens of thousands of dollars in savings for buyers who plan strategically.
Key Findings:
1. January Offers the Deepest Discounts
The study revealed that the median price per square foot in January 2024 was approximately $178.60, compared to $194.20 in May — a gap that could equal about $23,000 in savings on a 1,500 sq ft home.
2. February Comes Close
February followed as the next most affordable month, with a median price around $183.70 per square foot. These two months — the coldest of the year — consistently delivered the best deals nationwide.
3. May and June Are the Most Expensive
Peak buying season (spring to early summer) remains the priciest time to buy a home, with increased competition and higher asking prices. The influx of buyers drives prices up, especially for move-in-ready homes in desirable neighborhoods.
4. Price Differences Vary by State
While the trend is national, LendingTree’s analysis found that price differences can range from 3% to over 20%, depending on the state. Some regions experience a more pronounced seasonal effect, while others remain relatively stable year-round.
(Source: LendingTree “Cheapest Month to Buy a Home” study, 2024)
Why Home Prices Drop in January
1. Seasonal Slowdown in Demand
After the holidays, many buyers take a break from house-hunting. The combination of cold weather and financial fatigue from holiday spending means fewer active buyers — and that’s great news for anyone ready to make an offer.
2. Motivated Sellers
Homes listed in January often belong to sellers who need to move quickly — perhaps due to a job relocation or a deadline to close before tax season. Motivated sellers are more likely to negotiate on price or closing costs.
3. Reduced Competition
Less buyer activity means fewer bidding wars. When the market slows down, buyers gain leverage to negotiate lower prices or ask for favorable contingencies.
4. Carryover Inventory
Some listings from the previous year remain unsold and are re-listed in January, sometimes with price reductions. This creates more opportunities to find deals on homes that might have been overlooked during the busy fall months.
The Financial Impact of Buying in January
Let’s look at how this timing translates to real-world savings:
| Month | Median Price per Sq. Ft. | Price Difference (1,500 sq ft home) |
|---|---|---|
| January | $178.60 | — |
| February | $183.70 | +$7,650 |
| May | $194.20 | +$23,400 |
| June | $193.10 | +$21,750 |
Even if the difference seems modest per square foot, when multiplied by home size, it becomes a meaningful amount — potentially enough to cover closing costs, moving expenses, or a renovation project.
The Psychology Behind Seasonal Pricing
Real estate markets follow predictable human behavior patterns. Buyers prefer to move in warmer months, while sellers list homes when curb appeal is at its peak. In contrast, the slower winter months create a supply-and-demand imbalance that favors buyers.
By capitalizing on this psychological and logistical slowdown, informed buyers can strategically time their purchase for maximum savings.
Other Factors That Influence Home Prices
While January offers advantages, other elements still influence affordability:
- Mortgage Rates: A lower interest rate can save more money over time than a slightly cheaper purchase price.
- Economic Conditions: Employment trends, inflation, and consumer confidence all shape housing demand.
- Inventory Levels: If fewer homes are listed in January, buyers may have limited options despite better pricing.
- Market Segment: Luxury homes, starter homes, and condos may each follow different seasonal patterns.
For the best results, combine seasonal timing with strong financial preparation and market research.
Tips for Homebuyers: How to Take Advantage of Seasonal Savings
- Get Pre-Approved Early: Have financing ready before the new year begins so you can act quickly when the right home appears.
- Monitor Market Trends: Use data tools to track median prices in your desired area throughout the year.
- Be Ready to Negotiate: In January, sellers expect fewer offers — use this to your advantage.
- Work with an Experienced Agent: Agents who understand market timing can identify under-priced listings and guide you through negotiations.
- Avoid Over-Waiting: Don’t delay your purchase if rates or inventory start changing unfavorably — savings from timing can be offset by rising interest rates.
FAQs About the Cheapest Month to Buy a Home
Q1. Why is January the cheapest month to buy a house?
Because buyer demand drops after the holidays, sellers become more flexible on price, and inventory often includes discounted listings that didn’t sell in the previous year.
Q2. How much can I save by buying in January?
According to the LendingTree study, the average savings compared to peak months like May can be around $23,000 on a 1,500 sq ft home.
Q3. Is February also a good month to buy?
Yes. February typically shows similar patterns, making it the second-best month for finding lower prices and motivated sellers.
Q4. Do home prices always rise in spring and summer?
Historically, yes. More buyers enter the market in warmer months, which increases competition and drives up prices.
Q5. Should I wait for January even if I find a good deal now?
Not always. If you find the right property and financing terms, it might be better to buy sooner — interest rate changes can offset seasonal savings.
Q6. Does the cheapest month to buy vary by state?
Yes. While the national trend points to January, regional markets may experience smaller or larger seasonal fluctuations based on weather, local economies, and housing supply.
Conclusion: Smart Timing, Bigger Savings
The LendingTree “Cheapest Month to Buy” study confirms that timing matters in real estate. January and February consistently deliver lower home prices, giving well-prepared buyers an edge.
However, timing alone doesn’t guarantee success — buyers should also watch mortgage rates, local inventory, and personal financial readiness. By understanding seasonal trends and acting strategically, you can maximize your purchasing power and save thousands on your next home.
External Source:
LendingTree – Cheapest Month to Buy a Home Study (2024)
