Try to picture what it’s like being a mortgage lender or real estate salesperson right now. The phone isn’t ringing. Homes aren’t hitting the market. The wind howling outside is nothing compared to the boss howling inside about those last few loan files that haven’t been closed yet. Shouldn’t buyers feel some pity?

Heck no, according to real estate experts. Now’s the time for mortgage hunters in many parts of the country to pounce, they say, because only the most eager sellers and lenders try to get deals done at this time of year. As a result, price cuts, closing cost incentives and other bonuses await buyers brave enough to withstand the wind chill.

“The holidays slow people down. They slow the Realtors down. They slow the lenders down,” says Terry Eilers, a Browns Valley, Calif., author who wrote
How to Buy the Home You Want, for the Best Price, in Any Market.

“If you really want a deal in Alpena, Mich., go out and buy your home in January because you can’t find the sign sticking out of the snow. They’re desperate at that time.”

The seasonal drop-off
Just how slow can things get? It varies over time depending upon the state of interest rates, employment, stock prices and other economic measures. But year in and year out, all of the real estate indexes show the same thing — a significant drop-off in lending and housing activity during the December-to-February period in most areas.

“It is relative,” says Walter Molony, spokesman for the National Association of Realtors. “There is a slowdown, but not as much as you might think.”

Sales dip the most in January and February, reflecting the smaller numbers of people who shop for homes in November and December, Molony says.

Buyers can benefit from the decline in activity in several ways. On the home pricing front, they can try to save a few dollars by taking advantage of the fact that fewer people are shopping. “You might have less competitive pressure — fewer situations of competitive bidding on a property,” Molony says.

Because people who sell at this time of year tend to be those who really need to, buyers will often find they have even more clout. That affects not only prices, but other parts of the deal. For example, in a hot market at the busiest time of the year, sellers might be able to force buyers to forego property inspections. They’re not as likely to get away with that during slow periods.

“If you want to make the deals, that’s the time to look,” Eilers says.

Favorable interest rates
Of course, financing a home can be trickier than getting a good price for one. But winter holds some pleasant surprises there as well, especially this year. Inflation is stunningly low — just a little over 1 percent in the 12 months that ended Nov. 30. The Federal Reserve hints strongly that short-term rates will remain low for a long time — maybe into 2005. Rates on 30-year, fixed-rate mortgages are bobbing up and down close to the 6 percent mark.

Borrowers will find the lender’s office much less harried than the mall this time of year, too. Loan officers can take applications with less hassle and process paperwork in less time, allowing consumers to close more easily.

This is all relative, though. Whenever rates dip, a few stragglers rush into mortgage offices to refinance their home loans. Rates fell about one-quarter of a percentage point in the first two weeks of December, and about half of the mortgage applications were from homeowners who planned to refinance their loans.

When rates rise again, which they inevitably will do, people won’t stop buying houses. It probably will take a rise of a full percentage point — to about 7 percent — before rising rates make much of an effect on home sales. Contrary to popular belief, there is no seasonal variation in mortgage rates.

The seasonal benefit for buyers varies by location. In South Florida, for instance, there are many more people — and potential house hunters — milling about between December and Easter because that’s the tourist season. Ski resort towns and regions with red-hot growth may not see much slackening either. Even places that consumers might think would cool off with the weather don’t because of localized market phenomena.