In the Houston, TX market, closings of new homes declined year-over-year in May, but compared with April 2016, the percentage fall was less steep, hinting the market may be strengthening. New home closings saw a fall of 1.9% from the year earlier to 2,066. This came on the heels of a 10.0% drop year-over-year in April.
A total of 25,514 new homes were sold during the 12 months that ended in May, down from 25,555 for the year that ended in April.
Out of all housing closings, new home closings made up 18.8%. A year ago, 19.2% of total closings were new home closings. After a fall in April year-over-year, new and existing home closings stayed level in May.
Pricing and Mortgage Trends
In May, the average price of newly sold homes fell 4.0% year-over-year to $314,045 per unit. This fall compares to a 2.4% bump in April year-over-year.
Average mortgage size on new homes declined year-over-year in contrast to new home prices. In May 2016, the average mortgage size on newly sold homes saw a 3.4% decline from a year earlier. In April 2016, average mortgage size grew 2.2% 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 98.2% of new home closings to 97.8% of closings while attached units have gone from 1.8% of closings to 2.2% of closings.
There was a 4.3% decline year-over-year in the average unit size of newly sold homes to 2,913 square feet in May 2016. In April, the average size of new homes sold went from 2,968 square feet a year earlier to 3,068 square feet.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in May, but did not look to be a burden on the market. Together, foreclosures plus REO closings made up 9.4% of existing home closings, down from 12.8% a year earlier. The percentage of existing home closings involving foreclosures declined to 4.1% in May from 5.8% a year earlier while REO closings as a percentage of existing home closings fell to 5.3% from 7.0% a year earlier.