In the Detroit, MI market, new home closings declined year-over-year in January, and the percentage fall, which was steeper than December 2015, gave signals that the market may be worsening. Closings slumped 66.2% from a year earlier to 46. This followed a 37.9% decline year-over-year in December.
A total of 1,819 new homes were sold during the 12 months that ended in January, down from 1,909 for the year that ended in December.
Out of all housing closings, new home closings accounted for 1.1%. This is a drop 2.6% of closings a year earlier. Closings of new and existing homes slid year-over-year in January after also falling in December year-over-year.
Pricing and Mortgage Trends
The average price of newly sold homes jumped year-over-year 19.0% in January to $363,428 per unit. This hike is an improvement over the 17.1% bump in December year-over-year.
For newly sold homes, the average mortgage size saw a surge year-over-year along with new home prices. In January 2016, the average mortgage size on newly sold homes saw a 19.3% hike from a year earlier. In December 2015, average mortgage size on newly sold homes saw a 10.5% hike year-over-year from a year earlier.
Other Market Trends
As a percentage of new home closings, attached unit closings have risen from last year while single-family home closings have dropped. The share of new home closings belonging to attached units jumped from 56.6% of closings in January 2015 to 60.9% of closings in January 2016. At the same time, the share belonging to single-family homes sank to 39.1% of closings from 43.4% of closings.
The average unit size of newly sold homes slid 6.4% year-over-year to 2,383 square feet in January 2016. For newly sold homes, an average size drop contrasting with an average price bump was also seen in December 2015 when the average size of newly sold homes fell 7.1% to 2,323 square feet. The average size of newly sold homes moved from 2,501 square feet in December 2014 to 2,323 square feet in December 2015.
Foreclosures and real estate owned (REO) closings decreased in January from a year earlier, but remained a burden on the market. Combined, foreclosures plus REO closings made up 42.4% of existing home closings, below 44.7% a year earlier. The percentage of existing home closings involving foreclosures rose to 24.4% in January from 20.3% a year earlier while REO closings as a percentage of existing home closings dropped to 18.0% from 24.3% a year earlier.