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U.S. Housing Market Bucks Traditional Seasonality Trends

U.S. Housing Market Bucks Traditional Seasonality Trends

It’s well known that home sales follow seasonal trends: higher numbers are typically seen during the summer months thanks to an array of factors, including weather (particularly in more northern states), the winter holidays, and the traditional school year schedule. Home prices also tend to follow distinct seasonal patterns – there can be significant differences in median sold prices between summer and winter.

As with many other established housing trends, 2020 has taken these predictable seasonal patterns and subverted them. In particular, median home prices have continued to rise since summer 2020 without any large-scale downward shifts, a phenomenon not seen for many, many years. This suggests significant strength in the housing market, and follows other market indicators which have shown the same thing (pointed out in recent months on this blog, including rising home prices, preference for larger homes in suburban areas, and declining inventory).

The chart below shows monthly existing home sales dating back to 2005 for a number of top U.S. metro areas. As seen, home sales in the summer months have been more than 50 percent higher than those in the winter months. In 2020, total existing single-family home sales were about 15 percent higher than during the same period the year prior.

Below, we take a look at the monthly overall U.S. median existing single family sold price, dating back to 2000. We have included this longer-term chart to show how consistent the seasonal pattern of home prices has been over the years, and how much of an anomaly recent price behavior has been, when prices would normally be cycling down.

In our final chart, we see the monthly median single-family prices for several of the top metro areas shown above. It is noteworthy how broad-based the counter-seasonal performance has been in recent months.

As we monitor the strength of the U.S. housing market going into 2021, it will be worthwhile to keep an eye on home price trends and sales numbers as we begin to move into spring.

Using its Daily Home Price Flash, Black Knight’s Collateral Analytics analyzes home sales and pricing information for major U.S. markets on a bimonthly basis and publishes its findings on this blog.