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The snow has started to melt, you have a sudden urge to get your life in order, and with each passing day, more sunlight shines through the windows of a listing a prospective buyer decided to view on the way home from work. This picture hints at the seasonal indicators typically associated with March, which lead to increased market activity relative to prior months, and sets the stage for the peak summer season.

These are what we call seasonality trends, patterns we see every year around the same time. They help explain how buyers and sellers usually behave as the year begins to pick up and offer useful insights for planning real estate strategies. Buyers and sellers can use these seasonal trends to understand the broader market as they decide how to time their home purchase or listing.

Supply & Demand

First, let’s look at the average number of existing-home sales in the spring:

  • February: 312,810
  • March: 418,143
  • April: 461,762
  • May: 510,762

We typically see a prominent spike (33.5%) in existing homes sold in March. This is the largest increase of all the months in the year, on average, and represents the immediate impact that more favorable weather conditions can have on interest in looking for a home and on readiness to move.

Additionally, buyers may anticipate higher moving costs during peak times, motivating them to close on a home before prices get too high as more families enter the market in the summer, when their children are out of school.

On the other hand, sellers who have been on the market are likely to see more offers, potentially resulting in a higher sale price and a more favorable market coming out of the winter season.

Let's take a closer look at inventory to further understand supply:

  • February: 2.35 million
  • March: 2.36 million
  • April: 2.56 million
  • May: 2.55 million

Here we can see that there is typically a slight increase in inventory in March (0.7%); however, the surrounding months display more substantial gains (4.5% in February, 8.5% in April). Overall, March inventory is low compared to most months, which could lead to a short-term supply shortage amid the recent increase in buyer activity.

Listing a home in March may result in a move right before the end of the school year, which can be stressful and logistically difficult for families with children. Additionally, sellers may be aware that prices will peak in the summer, motivating them to hold off as long as possible to secure the best price.

As expected, the high demand and relatively low supply typically cause prices to jump by about 2.9%. These conditions signal the sudden tightening that begins in March and continues through spring, until supply catches up to demand, entering mid-summer. Despite this increase, prices remain relatively low, with January and February the only months with lower average prices.

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

Next, we will look at the number of days a typical home spends on the market to see how the growing number of buyers affects the time it takes a seller to find a deal in the early spring season. Historically, we see a steep decline in the number of days a home was listed prior to sale, which is expected in a tightening market:

In March, sellers found a buyer 9 days sooner on average when compared to February. More buyer competition leads to more frequent offers, prompting the largest decline in time spent on the market out of all the months. This supports the idea that March represents a turning point for the housing market as it transitions from the slow to the busy season.

Buyer Characteristics: Who is in the Market in March?

Lastly, let’s look at the share of first-time and cash buyers to get a sense of the typical buyer in the month of March.

In March, the percentage of homes purchased by first-time home buyers increased by 0.5% to 31.0%. While this is relatively low and surpasses only January and February, we can see that younger households are beginning to prioritize buying a home. The combination of more favorable weather conditions and relatively low prices compared to summer months may influence young households that are more price-sensitive; however, these buyers do not peak until early summer, in alignment with the end of the school year.

Looking at cash buyers, we see a 2.4% drop from February, the largest decline among all months. While March is the third-highest month for cash buyers, the majority prefer to purchase in January and February, when prices are at their lowest. Since investors are not affected by weather-related moving conditions, the determining factor is price, which, as we have seen, rises sharply in March.

For REALTORS®, March brings a distinct shift in the market driven by an inflow of buyers and relatively low supply, resulting in higher prices and quicker turnover. Buyers can be motivated by the understanding that a March move could mean locking in a reasonably good price compared to what will likely be seen in the coming months, coupled with the added convenience of warmer weather.