From Summer to Spring: A Shift in US Housing Market Seasonality

TL;DR

This paper investigates the recent shift in US housing market seasonality, linking it to earlier household mobility in spring post-2021, supported by data analysis and a calibrated economic model.

Contribution

It provides empirical evidence of earlier household mobility after 2021 and extends a theoretical model to explain the shift in housing market seasonality.

Findings

Mobility shifted earlier in the year after 2021.

The calibrated model reproduces the spring shift in prices and transaction volumes.

The change in household mobility timing explains recent seasonality shifts.

Abstract

The US housing market exhibits pronounced seasonal cycles: prices and sales rise through spring, peak in summer, and decline through autumn and winter. Since 2021, this pattern has shifted earlier in the calendar year, with spring strengthening at the expense of the traditional summer peak. A leading explanation for housing market seasonality is the search-and-matching model of Ngai and Tenreyro (2014), which links these cycles to household mobility through a thick-market mechanism. In this framework, periods with higher mobility generate thicker markets and higher prices and transaction volumes. Viewed through this lens, a shift in the seasonal cycle of prices and sales raises the question of whether the timing of household moves has changed. Did residential mobility shift earlier in the calendar year after 2021? We find that it did. Using SIPP data, and corroborating evidence from Google Trends indicators, we document a post-2021 shift in mobility toward spring. We extend the model to a monthly frequency, prove the existence and uniqueness of the equilibrium, and calibrate it to the observed mobility patterns. The calibrated model reproduces the spring shift in both prices and transaction volumes, consistent with the view that a change in the timing of household mobility alone can account for the recent shift in housing market seasonality.