New home closings in the Chattanooga, TN market fell year-over-year in December, and the percentage fall that was steeper than November 2015 gave implications of worsening market conditions. New home closings saw a 22.9% decline from a year earlier to 37. This came after a 9.1% drop year-over-year in November.
A total of 460 new homes were sold during the 12 months that ended in December, down from 471 for the year that ended in November.
As a percentage of overall housing closings, new home closings made up 4.4%. This is a decline 5.6% of closings a year earlier. For new and existing homes, closings slid in December after also declining in November year-over-year.
Pricing and Mortgage Trends
In December, the average per-unit price of new homes sank by 1.3% year-over-year to $305,610. This decline compares to a 1.8% rise in November year-over-year.
Average mortgage size on new homes declined year-over-year in contrast to new home prices. In December 2015, the average mortgage size on newly sold homes saw a 5.3% fall from a year earlier. Average mortgage size declined 6.3% in November 2015 from a year earlier.
Other Market Trends
As a percentage of new home closings, attached unit closings have grown from last year while single-family home closings have dropped. The share of new home closings belonging to attached units jumped from 4.2% of closings in December 2014 to 8.1% of closings in December 2015. Conversely, the share belonging to single-family homes fell to 91.9% of closings from 95.8% of closings.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in December, but did not appear to be dragging the market. Combined, foreclosures plus REO closings accounted for 21.2% of existing home closings, below 28.5% a year earlier. The percentage of existing home closings involving foreclosures dropped to 9.5% in December from 14.3% a year earlier while REO closings as a percentage of existing home closings slid to 11.8% from 14.2% a year earlier.