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CoreLogic Econ


Analyzing the February Leap Day

The Value of an Extra Day in 2016

Stuart Quinn

Everyone appreciates a little more time to complete their enormous daily task list, and every four years our calendars receive a roundup from the remainder of the preceding three years to offer us a “leap day.” Astronomers recognize it as the synchronization of the calendar to seasons, athletes and sport fans appreciate its alignment with international events such as the World Cup and Summer Olympics, but most simply acknowledge it as an additional day to get things accomplished. When considering a transactional business like home sales, will the additional day of February 29, 2016 make an impact on home sales for the month?

In short, not exactly. It appears the additional impact of a 0.27 percent day increase to our calendar during a leap year is largely overshadowed by broader economic, demographic and seasonal trends when taken in aggregate. On a month-over-month basis, February still contains the fewest number of days per month. However, in 2016, February leaps past January to become the month with the second least number of business days (after removing U.S. federal holidays and weekends).  

Daily sales data clearly shows a hockey-stick trend both at the weekly and monthly levels in sales volume, where we see the frequency in number of transactions escalating throughout the weeks. For instance, in Florida we find in the leap year of 2012, sales in the final seven days of the month comprise over a third of total sales, and one out of ten sales transacted in the month occurred on the final day of the month.1 Initially it looks like the extra day makes a difference, but upon expanding our analysis across non-leap years and a number of other states, we find this trend is not isolated to leap years, but rather an industry-wide trend of transaction timing (Figure 1).  As weekdays progress so do transactions, and Fridays regularly have the largest number of sales when compared across states and years. There is a minor difference in this trend in November, which is indicative of the Friday after Thanksgiving which many people take as a holiday (Figure 2).

Weekday Sales

Weekday Sales

The finality of the month seems to be what is of the utmost importance to real estate transactions, not whether that day is the 28th or 29th. This makes sense when considering the way interest on purchase transactions accrue for borrowers. Closing on the final day of the month only requires the new homeowner to pay one month of interest, rather than the full balance of the month were they to close on the first.

1Home sales for this analysis include any non-distressed resale or new sale for 1 – 4 family residential units.

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