In August, the Detroit, MI market saw a drop year-over-year in new home closings, and the percentage fall that was steeper than July 2015 gave implications of worsening market conditions. There was a 39.7% decline in new home closings from a year earlier. This came after a 35.3% decline year-over-year in July.
A total of 1,923 new homes were sold during the 12 months that ended in August, down from 1,996 for the year that ended in July.
Out of all housing closings, new home closings made up 1.7%. As a part of the whole, new home closings were 2.5% a year earlier. Closings of new and existing homes dropped year-over-year in August after also falling in July year-over-year.
Pricing and Mortgage Trends
Average price of newly sold homes had a 8.2% boost year-over-year to $330,181 per unit in August. This surge compares to a 3.4% fall in July from a year earlier.
Average mortgage size on new homes saw a drop year-over-year in contrast to prices of new homes. In August 2015, there was a 5.1% drop in the average mortgage size on new homes to $256,925. Average mortgage size slid 1.5% in July 2015 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 59.8% of closings in August 2014 to 68.5% of closings in August 2015. Conversely, the share belonging to single-family homes sank to 31.5% of closings from 40.2% of closings.
The average unit size of newly sold homes dropped 11.4% year-over-year to 2,242 square feet in August 2015. The average size of newly sold homes moved from 2,684 square feet in July 2014 to 2,087 square feet in July 2015.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in August, but did not look to be a burden on the market. Foreclosures and REO closings, taken together, made up 24.6% of existing closings, lower than 28.8% a year earlier. The percentage of existing home closings involving foreclosures stayed at 10.8% of closings in August from a year earlier while REO closings as a percentage of existing home closings declined to 13.7% from 18.0% a year earlier.