New home closings slid year-over-year in July in the Phoenix, AZ market, but the percentage drop, which was less steep than in June 2015, seemed to be hinting at market improvement. There was a 4.4% decline in new home closings from a year earlier. This came after a 4.8% decline year-over-year in June.

A total of 9,829 new homes were sold during the 12 months that ended in July, down from 9,867 for the year that ended in June.

As a percentage of overall housing closings, new home closings accounted for 8.8%. This is down from the 10.2% of closings a year earlier. For new and existing homes, closings increased year-over-year in July after also increasing in June year-over-year.

Pricing and Mortgage Trends

The average price of new homes slid by 2.0% year-over-year to $325,317 per unit in July. This decline compares to a 3.7% hike in June year-over-year.

For newly sold homes, the average mortgage size slid year-over-year in contrast to average price of new homes. Average mortgage size declined 2.1% to $268,537 in July from a year earlier. In June 2015, average mortgage size climbed 1.3% from a year earlier.

Other Market Trends

The share of new home closings made up by attached units has risen while the share belonging to single-family homes has fallen. The share of new home closings belonging to attached units climbed from 5.0% of closings in July 2014 to 7.4% of closings in July 2015. At the same time, the share belonging to single-family homes dropped to 92.6% of closings from 95.0% of closings.

The average unit size of newly sold homes went from 2,536 square feet in July 2014 to 2,517 square feet in July 2015. In June, the average size of new homes sold went from 2,455 square feet a year earlier to 2,460 square feet.

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. Combined, foreclosures plus REO closings made up 13.9% of existing home closings, below 19.6% a year earlier. The percentage of existing home closings involving foreclosures declined to 6.3% in July from 9.0% a year earlier while REO closings as a percentage of existing home closings dropped to 7.7% from 10.6% a year earlier.

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