Pending home sales data, released monthly, reflect the number of homes under contract but not yet closed, which is a key indicator of housing market activity. These sales are important for predicting future home sales and understanding broader market trends. However, pending home sales are greatly influenced by seasonality, which plays a significant role in the housing market's annual cycle.

Seasonality refers to the predictable fluctuations in market activity that occur at different times of the year. When discussing real estate, seasonality is marked by changes in demand, supply, and overall market dynamics based on weather, holidays, and school schedules. Typically, the housing market sees its highest activity during the spring and summer months. During that period, pending sales rise in March and peak in June. This is largely due to more favorable weather conditions, families wanting to relocate before the school year begins, and the general desire to settle into new homes during the warmer months. 

Conversely, the fall and winter months—particularly from November through January—often experience a slowdown in activity. Cold weather, travel interruptions, and fewer listings all contribute to reduced activity over this period. Many potential buyers and sellers put their plans on hold until the spring, resulting in fewer homes going under contract. Additionally, mortgage rates, which can vary over time, might have a more chilling effect during these slower months, with buyers more reluctant to make big moves in uncertain economic times when they might normally otherwise.

Additionally, NAR produces non-seasonally adjusted figures with the Existing-Home Sales monthly data release. For the fullest picture, the best way to analyze seasonal patterns is to track the “not seasonally adjusted” figures from EHS on the right-hand side of the graphs. These raw figures reflect actual home sales without statistical adjustments, making it easier to observe natural fluctuations. The non-seasonally adjusted figures can be used to analyze seasonal trends and pending home sales to get an idea of what to expect from the market in the upcoming months.

Despite the natural fluctuations driven by seasonality, the real estate market can still experience unexpected shifts based on broader economic conditions, such as interest rates, inflation, or local market dynamics (see our latest Instant Reactions for information about mortgage rates and jobs, for example). Some markets may remain active even during slower periods due to unique regional factors or investor interest. If you’re interested in how your market is doing, check out our Local Market Reports.

Pending home sales are directly tied to the seasonal ebb and flow of the real estate market. Understanding this cyclical pattern can help buyers, sellers, and real estate professionals make informed decisions about the best times to act.