In the Kansas City, MO market, closings of new homes fell year-over-year in February, and the percentage decline worsened from January 2016, indicating the market may be weakening. There was a 37.7% fall in new home closings from a year earlier. This came on the heels of a 14.0% drop year-over-year in January.
A total of 2,314 new homes were sold during the 12 months that ended in February, down from 2,371 for the year that ended in January.
New home closings made up 2.6% of overall housing closings. This is down from the 4.8% of closings a year earlier. Closings of new and existing homes grew year-over-year in February after also rising in January year-over-year.
Pricing and Mortgage Trends
In February, the average price for new home closings was $332,409, a 6.6% fall from last year. This drop compares to a 10.8% boost in January year-over-year.
The average mortgage size on newly sold homes saw a decline year-over-year in contrast to new home prices. It declined 7.5% in February from a year earlier, reaching $277,367. In January 2016, average mortgage size on newly sold homes saw a 10.3% gain year-over-year from a year earlier.
Other Market Trends
The percentage of new home closings belonging to single-family homes has risen from last year while the portion of new home closings belonging to attached units has dropped. The share of new home closings belonging to single-family homes gained from 97.4% in February 2015 to 98.9% of closings in February 2016. Conversely, the share of new home closings belonging to attached units slid to 1.1% of closings from 2.6% of closings.
The average unit size of newly sold homes declined 15.9% year-over-year to 2,102 square feet in February 2016. In January, the average size of new homes sold went from 2,409 square feet a year earlier to 2,204 square feet.
Foreclosures and real estate owned (REO) closings continued to increase in February from a year earlier and remained a drag on the market. Combined, foreclosures plus REO closings accounted for 29.4% of existing home closings, above 25.0% a year earlier. The percentage of existing home closings involving foreclosures rose to 15.4% in February from 11.2% a year earlier and REO closings moved from 13.8% of existing home closings in February 2015 to 14.0% in February 2016.