As we head into the holiday season, it's a good time to take a step back and look at what typically happens in the housing market each December. Historical data suggests that December has some distinctive patterns that set it apart from the months around it. Understanding these seasonal trends helps set expectations for buyers and sellers and can guide timing-related decisions. 

These are what we call seasonality trends: patterns we see every year around the same time. They help explain how buyers and sellers typically behave as the year winds down and offer useful insights for planning real estate strategies. 

Housing Supply & Demand

First, let's look at the average number of existing-home sales in the months before and after December:

  • October: 441,667
  • November: 398,571
  • December: 412,286
  • January: 298,286

The data shows that there is typically a slight uptick in December home sales relative to the prior month (an increase of roughly 3.9%). This happens even though the broader market is in its normal winter slowdown. The trend becomes more evident in January, when existing home sales drop to 298,286, representing a 27.2% month-to-month decline. 

Several end-of-year factors help explain why motivated buyers show up in December. These include year-end tax incentives, job relocations that start in January, the desire for a child to start at a new school at the beginning of the second term, or simply the need to wrap up various other significant life events—all of which help explain the disruption in waning sales typically associated with winter. 

This increase in buyer activity comes even though there are fewer listings. The number of homes for sale typically drops as we head into December. In fact, December is usually the month with the fewest listings throughout the year:

  • October: 2,495,238
  • November: 2,431,429
  • December: 2,213,810
  • January: 2,250,476

Inventory typically drops by about 9.4% in December compared to November. While motivated buyers are looking to settle into a new home before the holidays, sellers are looking to stay put and list their home in the upcoming year. Inventory even inches up slightly in January (about 0.60%) once the holidays are over and moving becomes easier.

Sellers are also likely hesitant to list their home in December because they know it typically takes over a month to sell. A closing in December can mean moving during the holidays or in colder weather, which is less appealing. Further, many sellers believe they'll get a better price in the spring.

And the data support this. Prices in December are usually higher (0.5% up on average) than in November, as there are fewer listings on the market.

Days on the Market: How Quickly Sellers Can Expect to Find a Buyer

Another helpful metric for understanding the market is "days on the market." This can indicate the degree to which housing turnover has slowed or accelerated compared to other months, with implications for how quickly a seller can expect to find a buyer in a particular season. Historically, homes spend a longer amount of time on the market in December relative to November, as shown below:

This is a normal seasonal pattern. Even though sales usually see a slight increase in December, new listings decline sharply as many homeowners wait until after the holidays to put their homes on the market. That means the homes that do sell in December are often those that have been listed for a while.

Home Buyer Characteristics: Who Is in the Market in December?

Lastly, looking at the share of first-time and all-cash buyers can help us get a sense of the typical buyer in December. 

First-time buyers typically make up about 31.8% of all existing home sales, and their share usually rises slightly in December. First-time home buyers are particularly sensitive to year-end tax benefits; for example, they can deduct prorated property taxes and points paid at the time of closing. Similarly, moving into a new home right at the beginning of the year allows them to maximize the mortgage interest they can deduct the following year.

All-cash buyers, on the other hand, usually account for 21.7% of sales, but their share decreases slightly in December. With fewer new listings and slightly higher prices, many investors pause activity during the holiday season and wait for more inventory in the upcoming months.

For REALTORS®, the key takeaway is that December brings motivated buyers but fewer listings. Pricing correctly and understanding these seasonal patterns can help you navigate this unique month more effectively.