The Home-Selling Season: June to December?

December 16, 2016 / Valerie Tucker Ausband, Regional Vice President—Southeast

The Home Buying Season

Does the housing industry put too much emphasis on the spring home-buying season? While the April-to-July period continues to account for 40 percent of annual sales, a look at existing home sales from the National Association of Realtors (NAR) shows that strong activity continues long after kids go back to school and even after snow begins to fly in some areas.

Over the previous 12 months, June captured the lead in home sales with 582,000 existing homes (and condos) sold, but December 2015 trailed June by just over 25 percent—with 436,000 homes sold during the last month of the year.

When it comes to new homes, 50,000 newly built units sold in June 2016, just 24 percent more than the 38,000 new homes sold in December 2015. The story was much the same during the most recent housing boom—when new home sales in June 2006 led December 2006 by 27,000 units, an increase of 28 percent.

There’s Less of a Link Between School Calendars and Home Sales

One factor is that home selling is becoming less dependent on the school calendar and other seasonal factors. Census data tells us that households are far less likely to have school-age children at home than in the recent past:

  • Married couples with children account for 20.2 percent of today’s households, down from 30.7 percent in 1980.
  • Single adults living alone now describe 26.7 percent of all households, up from 22.6 percent in 1980.

Why Spring is Still the Season

ln many markets with snowy winters, there is little home-building activity during December, January, and February. In a Trulia analysis from 2013, construction starts in the Midwest were 2.5 times greater in June than in January. However, in the South, building commencements were 50 percent higher in the summer peak than in the middle of winter.

Trulia’s research on seasonal activity also found that key measures like online searches and new construction starts tend to peak in March and remain elevated through August. However, the inventory of homes for sale tends to continue rising through the summer months into the fall.

Rising home sales activity in the spring tends to bring higher prices. This often spurs other homeowners to put their homes up for sale—creating a secondary effect by releasing more homes on the market in the third and fourth quarters of the year.

Some experts theorize that rising home sales activity in the spring tends to bring higher prices. This often spurs other homeowners to put their homes up for sale—but it often takes those homeowners months to get their homes ready to sell. As a result, sales spikes that happen in the spring create a secondary effect by releasing more homes on the market in the third and fourth quarters of the year.

Not Adjusting for Seasonality

In 2016, June posted the highest median sales price of $289,800 for existing homes, according to NAR. As more homes were added to the market over the year, home prices declined, with the median-priced home falling to $274,300 in October, the most recent month for which data is currently available.

In short, with the strong activity of the past couple of years, there’s really no ideal time of year for housing finance professionals to take a vacation. Spring and summer remain important, but so do November and December. As tempting as it is to view January and February as an off-season, those months really remain the only opportunity to plan ahead for the rising activity of March and the months that follow.

Mortgage insurance can give borrowers greater freedom to take advantage of the slightly better pricing we typically see in this current season as the inventory of homes climbs from the levels of four or five months ago. Please contact your United Guaranty sales representative for more information on how MI can provide additional options to qualified borrowers with limited money for a down payment.

Valerie Ausband

Valerie Tucker Ausband is United Guaranty's Regional Vice President for the Southeast. She has more than 20 years of mortgage industry experience. Valerie joined United Guaranty in 1999 as an account executive after having served in a similar role for an Atlanta-based title company. Valerie was named United Guaranty's vice president for national accounts in 2004, and she was promoted to regional vice president in 2006. Ausband, who lives and works in the Atlanta area, is a graduate of the University of Georgia. She has earned the Accredited Mortgage Professional (AMP) designation from the Mortgage Bankers Association. She is active with the Mortgage Bankers Association of Georgia and has held a number of leadership roles in the organization over the years.

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