Closings of new homes in the Memphis, TN market declined year-over-year in July, and the percentage fall that was steeper than June 2016 gave implications of worsening market conditions. New home closings saw a 59.4% fall from a year earlier to 39. This came on the heels of a 27.8% decline year-over-year in June.
A total of 1,019 new homes were sold during the 12 months that ended in July, down from 1,076 for the year that ended in June.
New home closings represented 1.8% of overall housing closings. This is down from the 4.1% of closings a year earlier. Following a year-over-year decline in June, closings of new and existing homes also sank year-over-year in July.
Pricing and Mortgage Trends
Average price of newly sold homes saw a 17.0% hike year-over-year in July to $276,074 per unit. This surge is smaller than the 17.7% boost in June year-over-year.
The average mortgage size on newly sold homes saw a rise year-over-year along with new home prices. Average mortgage size grew 15.0% to $246,774 in July from a year earlier. In June 2016, average mortgage size rose 17.6% from a year earlier.
Other Market Trends
Closings of attached units, as a percentage of new home closings, have gained from last year while closings of single-family homes have slumped. The share of new home closings belonging to attached units gained from no part of closings in July 2015 to 12.8% of closings in July 2016. Meanwhile, single-family home closings as a percentage of all new home closings fell to 87.2% of closings from all of closings.
For all new homes sold, the average unit size declined 11.2% year-over-year to 2,422 square feet in July 2016. For newly sold homes, an average size drop contrasting with an average price lift was also seen in June 2016 when the average size of newly sold homes dropped 13.1% to 2,338 square feet. The average size of newly sold homes moved from 2,690 square feet in June 2015 to 2,338 square feet in June 2016.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in July, but did not appear to be dragging the market. Foreclosures and REO closings, taken together, accounted for 22.5% of existing closings, lower than 34.0% a year earlier. The percentage of existing home closings involving foreclosures slid to 10.0% in July from 18.9% a year earlier while REO closings as a percentage of existing home closings fell to 12.5% from 15.1% a year earlier.