Closings of new homes in the Richmond, VA market sank year-over-year in May, but with a percentage decline less steep than April 2016, there are hints the market may be evening out. There was a 10.1% decline in new home closings from a year earlier. This came on the heels of a 36.1% fall year-over-year in April.
A total of 2,233 new homes were sold during the 12 months that ended in May, down from 2,251 for the year that ended in April.
New home closings made up 7.1% of overall housing closings. This is down from the a year earlier when new home closings accounted for 9.1% of total closings. Closings of new and existing homes increased year-over-year in May following a fall in April year-over-year.
Pricing and Mortgage Trends
In May, there was a 10.2% drop year-over-year in the average per-unit price of newly sold homes, settling at $352,867. This decline compares to a 4.0% gain in April year-over-year.
Average mortgage size on new homes saw a drop year-over-year in contrast to prices of new homes. The average mortgage size slid to $305,336 in May, marking a 7.2% fall compared with last year. In April 2016, average mortgage size on newly sold homes saw a 2.0% boost year-over-year from a year earlier.
Other Market Trends
As a share of new home closings, single-family home closings have climbed from last year while the share belonging to attached units has fallen. Single-family home closings rose from 80.9% of new closings in May 2015 to 96.9% of closings in May 2016. Conversely, the share of new home closings belonging to attached units declined to 3.1% of closings from 19.1% of closings.
For all new homes sold, the average unit size fell 10.2% year-over-year to 2,642 square feet in May 2016. The average size of newly sold homes moved from 2,601 square feet in April 2015 to 2,642 square feet in April 2016.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in May, but did not appear to be dragging the market. Together, foreclosures plus REO closings made up 16.3% of existing home closings, down from 21.3% a year earlier. The percentage of existing home closings involving foreclosures dropped to 7.8% in May from 11.5% a year earlier while REO closings as a percentage of existing home closings declined to 8.5% from 9.8% a year earlier.