Mortgage rates have been moving wildly over the past few years. In fact, it was still possible to get a 3% 30-year mortgage as early as 2022.
By the end of 2023, you may be facing an 8% mortgage rate. And today, your level may start at 5, 6, or 7.
Volatility has reigned supreme as the Fed battles inflation and economic uncertainty makes long-term guidance for rates difficult.
But one thing I have noticed is that prices tend to do better at certain times of the year.
That is in the winter months, in the Northern Hemisphere which include December, January, and February.
Winter is a Historically Good Season for Mortgage Rates
Apart from finding a lot of technology here, winter starts from December 1 until the end of February.
It’s three months more or less, if you want to get technical, there’s an astronomical season and a meteorological season.
Anyway, I’m going to keep it simple and focus on the months of December, January, and February. These are your prime winter months, and when it’s coldest.
Although I don’t like the cold (since I live in Southern California), winter is not all bad. In fact, there is a perk to winter when it comes to mortgage rates.
And maybe buying a home too.
I crunched the numbers going back to 1972 and found that mortgage rates tend to be the lowest in the winter months.
Using Freddie Mac’s Primary Mortgage Market Survey (PMMS), I compiled monthly averages to determine if there were any outstanding months.
And lo and behold, February it was the best month for mortgage rates since 50 years.
Real Estate Rates Hit 50-Year Low in February
As you can see from my chart, which took a lot of time to create, the 30 year fixed income reached 7.62% in the month of February going back to 1972, with Freddie Mac.
While that is one full point above Freddie’s current weekly rate of 6.69%, it is the best month on record.
The only better month was January, with an average rate of 7.64%, followed by December with 7.68%.
So what does that tell us? Well, that Winter is the best season for housing costs! Throughout the winter months, mortgage rates are often the best, or the lowest.
To take advantage of this opportunity, you may want to refinance your mortgage during these months or even buy a home during these months.
While I’m not a big fan of timing the market, there are some obvious benefits that outweigh the prices themselves.
There is usually less competition when buying a home as it is a quieter time of year, and there are fewer other customers refinancing a mortgage.
This means you can buy a lower home price, or in the case of a refinance, get better customer service and faster turnaround times.
Also, mortgage lenders often pass on more savings during slow times. When they are less busy, they need to improve the business so this may explain why the prices are going down.
Spring and Summer are the Worst Seasons for Real Estate Taxes
Now we know that winter is the best season when it comes to mortgage rates. But what about the worst?
When the weather starts to heat up, mortgage rates tend to go up.
Although March seems to be a decent month that marks the end of winter and the beginning of spring, it gets worse from there.
The worst months are May and June, and April is right up there with them. This also happens when shopping at home is full.
So you get the unwelcome combination of more competition from other home buyers and higher loan rates (on average).
This is the opposite of buying a home in the spring/early summer as sellers may have the courage to stand firm on the price. And lenders may not be willing to offer discounts or negotiate much.
All in all, you’re looking at a potentially higher home sale price and a higher mortgage rate.
The only real consequence is that there may be other sales to choose from, which can be a plus as it has been a few years now.
Real Estate Rates are Unpredictable and May Vary Regardless of Season
One final note here. Just because mortgage rates tend to be lower in the winter doesn’t mean they stay that way.
The same is true for high rates in spring and summer. There have been and will be years when the opposite is true.
For example, the 30-year fixed rate through 2024 was around 6.60% and was as low as 6% in mid-September.
But in 2023, the 30-year fell to about 6% in February and reached about 8% in October.
So sometimes it will “work” and sometimes it won’t. Pay attention to major trends when looking to track mortgage rates.
Right now, we seem to be going down as inflation slows down and the economy seems to be faltering.
This means that mortgage rates are likely to continue to decrease this month and next, and possibly reduce those rates again in February 2025.
Just know that there will always be surprises (presidential inauguration anyone?), and good weeks and bad weeks along the way.
Before creating this site, I worked as an account manager for a real estate broker in Los Angeles. My experiences in the early 2000s inspired me to start writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the mortgage process. Follow me on Twitter for the latest.
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