Closings of new homes sank year-over-year in July in the Houston, TX market, and there were hints of weakening market conditions with a percentage drop steeper than that of June 2016. New home closings saw a 34.7% fall from a year earlier to 1,449. This came on the heels of a 21.0% drop year-over-year in June.
A total of 24,474 new homes were sold during the 12 months that ended in July, down from 25,244 for the year that ended in June.
New home closings represented 15.8% of overall housing closings. This is down from the a year earlier when new home closings represented 17.2% of total closings. For new and existing homes, closings fell in July after also declining in June year-over-year.
Pricing and Mortgage Trends
The average price of newly sold homes dropped 4.9% year-over-year in July to $308,045 per unit. This decline follows a move from $330,335 per unit to $332,750 from June 2015 to June 2016.
Average mortgage size on new homes saw a drop year-over-year in contrast to prices of new homes. In July 2016, the average mortgage size on newly sold homes saw a 3.8% fall from a year earlier. Average mortgage size gained 1.0% in June 2016 from a year earlier.
Other Market Trends
There has not been much movement in the composition of the market with regard of the types of properties sold. From a year ago, single-family home closings have moved from 98.1% of new home closings to 97.8% of closings while attached units have gone from 1.9% of closings to 2.2% of closings.
For all new homes sold, the average unit size dropped 7.3% year-over-year to 2,871 square feet in July 2016. In June, the average size of new homes sold went from 3,137 square feet a year earlier to 2,821 square feet.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in July, but did not look to be a burden on the market. Combined, foreclosures plus REO closings made up 9.2% of existing home closings, below 10.4% a year earlier. The percentage of existing home closings involving foreclosures went from 4.2% in July 2015 to 3.9% in July 2016 and REO closings moved from 6.2% of existing home closings in July 2015 to 5.4% in July 2016.