In January, there was a drop year-over-year in new home closings in the Memphis, TN market, and the market seemed to be weakening with a percentage drop steeper than in December 2015. New home closings saw a 38.2% fall from a year earlier to 34. This came after a 27.6% fall year-over-year in December.
A total of 811 new homes were sold during the 12 months that ended in January, down from 832 for the year that ended in December.
New home closings represented 2.7% of overall housing closings. This is down from the a year earlier when new home closings made up 3.9% of total closings. Closings of new and existing homes saw a fall year-over-year in January after remaining steady in December year-over-year.
Pricing and Mortgage Trends
For newly sold homes, the average price declined 6.5% year-over-year in January to $218,703 per unit. This fall compares to a 13.3% hike in December year-over-year.
For newly sold homes, the average mortgage size saw a fall year-over-year in contrast to new home prices. In January 2016, there was a 9.8% decline in the average mortgage size on new homes to $186,485. In December 2015, average mortgage size climbed 9.8% 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. Attached unit closings gained from 3.6% of all closings in January 2015 to 17.6% of closings in January 2016. Conversely, the share belonging to single-family homes dropped to 82.4% of closings from 96.4% of closings.
For all new homes sold, the average unit size slid 28.2% year-over-year to 1,873 square feet in January 2016. In December, the average size of new homes sold went from 2,287 square feet a year earlier to 2,466 square feet.
Foreclosures and real estate owned (REO) closings continued to rise in January from a year earlier and remained a drag on the market. Together, foreclosures plus REO closings represented 47.0% of existing home closings, up from 45.4% a year earlier. The percentage of existing home closings involving foreclosures went from 24.6% in January 2015 to 24.1% in January 2016 and REO closings as a percentage of existing home closings grew to 22.9% from 20.8%.