Do home prices drop in the winter?

Yes, prices usually soften as the weather cools

Every fall, someone sees a headline that home values dropped and calls me to ask if they should panic. Usually the answer is no. Usually the answer is "it's October."

Here is an example. Zillow's September 2026 market report, released October 6, 2026, said the typical U.S. home value fell 0.5% from August to September. In the same report, values were still up 1% from a year earlier. Zillow called it an early winter in the housing market and pointed to the usual fall slowdown.

The slowdown showed up in buyer activity too. Newly pending sales were down 11.2% from August and 8.5% from a year earlier.

So prices dipped from one month to the next and were still higher than the year before. Both things were true at once. That is what seasonality looks like. It is less like a stock crash and more like a beach town in February: the same town, fewer people on the boardwalk.

Why the calendar moves prices

Housing has seasons the way ski resorts do. Demand tends to build in spring, when families try to buy before the school year. Zillow's analysis of 2025 sales found homes listed in the last two weeks of May sold for 1.7% more nationwide.

Then demand eases. Redfin's April 2026 analysis of price cuts found that spring sellers are the least likely to cut their price, and December sellers are the most likely. When fewer buyers are out, sellers who need to move adjust.

The September 2026 Zillow table showed how broad the pattern can be. Of the 50 large metros it listed, 49 declined from August to September. Miami was flat. California was in the same boat: San Jose was down 1% for the month, Los Angeles and Sacramento down 0.5%, San Diego down 0.6%, and San Francisco and Riverside down 0.3%.

When nearly every big market dips the same month, it is the weather, not the water. Something specific to one city usually does not show up in 49 of them at once.

How the big indexes handle seasons

Economists have dealt with this for a long time. The Federal Housing Finance Agency's flagship purchase-only house price index is seasonally adjusted. FHFA says the adjustment is designed to remove recurring calendar patterns from the index. It uses a standard Census Bureau method to do it.

A seasonally adjusted number answers a different question than a raw one. The raw number asks, "Did prices go down this month?" The adjusted number asks, "Did prices go down more or less than they usually do this time of year?"

Both are useful. For a seller pricing a house in November, the raw number matters, because buyers in November are real buyers with real winter budgets. For anyone trying to tell if the market actually turned, the year-over-year change or the seasonally adjusted figure is the better guide.

If a headline does not say which kind of number it is, read the fine print before you read the comments.

What this means for an appraisal

Appraisers have to account for market changes between when a comparable sale went under contract and the appraisal's effective date. Fannie Mae's guidance says time adjustments, or the lack of them, must be supported by evidence, ideally other sales and contracts. It also accepts home price indexes and paired sales, meaning similar homes that sold at different times.

Seasonality is where lazy work shows. A 12-month average can hide a market that rose all spring and gave some back in the fall. A single month-to-month dip can make a stable market look like it is falling.

My approach is to read the market in real time. I test the most recent window the data supports, such as the last 30 or 45 days, and compare it to longer periods. If recent sales show a seasonal pullback, I adjust for it and say why. If the dip is just noise from a few sales, I say that too. Either way, the reader should see the evidence, not a guess.

The goal is not to scare anyone or flatter anyone. It is to describe the market the buyer is actually standing in. A report should teach the reader what the market did and why, so the number makes sense to someone who was not there.

What to do if you are selling or buying in winter

If you are selling:

• Price for the season you list in. Use the most recent sales and current competition, not last spring's best sale.
• Expect fewer showings. Fewer buyers usually means fewer competing offers.
• Fix condition issues before listing. Winter buyers notice a cold, drafty house with a heater that sounds like a leaf blower.
• If you can wait, check your metro's pattern. Some markets peak earlier than others. Zillow found San Jose's best listing window in 2025 was the first two weeks of February.

If you are buying:

• Winter can mean more room to negotiate, since sellers are more likely to cut.
• Compare a home's price to the same month last year, not to last month's headline.
• Look at how long the home has been listed. A spring listing still sitting in December may have a motivated seller.

Seasons come back every year. A real downturn is something different, and you can tell them apart by checking the year-over-year number.