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A few comments on the Seasonal Pattern for House Prices

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by Calculated Risk on 7/28/2021 10:23:00 AM

A few key points:
1) There is a clear seasonal pattern for house prices.
2) The surge in distressed sales during the housing bust distorted the seasonal pattern.
3) Even though distressed sales are down significantly, the seasonal factor is based on several years of data – and the factor is now closer to normal (second graph below).
4) Still the seasonal index is probably a better indicator of actual price movements than the Not Seasonally Adjusted (NSA) index.

For in depth description of these issues, see Jed Kolko’s article from 2014 (currently Chief Economist at Indeed) “Let’s Improve, Not Ignore, Seasonal Adjustment of Housing Data”

Note: I was one of several people to question the change in the seasonal factor (here is a post in 2009) – and this led to S&P Case-Shiller questioning the seasonal factor too (from April 2010). I still use the seasonal factor (I think it is better than using the NSA data).


Click on graph for larger image.

This graph shows the month-to-month change in the NSA Case-Shiller National index since 1987 (through May 2021). The seasonal pattern was smaller back in the ’90s and early ’00s, and increased once the bubble burst.

The seasonal swings declined following the bubble, however the recent price surge changed the month-over-month pattern.

The second graph shows the seasonal factors for the Case-Shiller National index since 1987. The factors started to change near the peak of the bubble, and really increased during the bust.


The swings in the seasonal factors have decreased, and the seasonal factors has been moving back towards more normal levels.

Note that the recent price surge hasn’t distorted the seasonal factors.

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