Home sellers looking to maximize their sale price may want to avoid the start of the busy spring buying season and list their properties closer to the midpoint of the year, according to a Zillow analysis released Thursday.
In a study of 2023 home sales, the real estate analytics company found that homes listed in the first two weeks of June sold for 2.3% more than at other times of the year, equating to an additional $7,700 on the typical U.S. home. This differs from 2019 data, prior to the COVID-19 pandemic, which found that the first two weeks of May were the best time to list a home.
Zillow posits that this shift is driven by higher mortgage rates in the post-pandemic era.
“The old logic was that sellers could earn a premium by listing in late spring when their home would be on the top of the pile of listings when search activity was at its peak,” Zillow chief economist Skylar Olsen said in a statement.
“Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.”
The research found that in 30 of the 35 largest U.S. metro areas, homes listed for sale between the start of May and early July 2023 posted the highest sales prices.
But there were outliers. In San Francisco, for example, the best time to list was in the last two weeks of February, when sales commanded a pricing premium of 4.2%, or an additional $50,300 on the typical home.
Other metro areas where sales prices were maximized prior to the typical May-to-June window included Houston; San Diego; Cincinnati; and Portland, Oregon.
The premium recorded in June 2023 came on the heels of the first spring in 15 years in which 30-year fixed rates topped 6%. According to HousingWire’s Mortgage Rates Center, the 30-year fixed rate reached 6.83% to end June.
But there was a slight pullback in rates from May to June, “which likely presented an opportunity for determined buyers heading into summer” and led to a boost in competition and sales prices, Zillow reported.
