In the Detroit, MI market, closings of new homes declined year-over-year in April, and the percentage drop, which was steeper than March 2016, gave signals of weakening market conditions. New home closings saw a drop of 59.6% from the year earlier to 74. This followed a 43.8% decline year-over-year in March.
A total of 2,055 new homes were sold during the 12 months that ended in April, down from 2,164 for the year that ended in March.
As a percentage of overall housing closings, new home closings represented 1.3%. This is down from the a year earlier when new home closings represented 2.8% of total closings. Closings of new and existing homes dropped year-over-year in April after also falling in March year-over-year.
Pricing and Mortgage Trends
The average price of newly sold homes rose year-over-year 1.5% in April to $313,693 per unit. This bump compares to a 1.1% fall in March from a year earlier.
Average mortgage size on new homes saw a decline year-over-year in contrast to prices of new homes. In April 2016, the average mortgage size on newly sold homes saw a 4.0% decline from a year earlier. Average mortgage size declined 12.6% in March 2016 from a year earlier.
Other Market Trends
As a share of new home closings, single-family home closings have climbed from last year while the share belonging to attached units has fallen. Single-family home closings jumped from 43.2% of new closings in April 2015 to 48.6% of closings in April 2016. Conversely, the share of new home closings belonging to attached units declined to 51.4% of closings from 56.8% of closings.
The average unit size of newly sold homes dropped 8.3% year-over-year to 2,401 square feet in April 2016. In March, the average size of new homes sold went from 2,736 square feet a year earlier to 2,185 square feet.
Foreclosures and real estate owned (REO) closings fell in April from a year earlier, but stayed a drag on the market. Together, foreclosures plus REO closings made up 31.0% of existing home closings, down from 34.0% a year earlier. The percentage of existing home closings involving foreclosures slid to 12.1% in April from 15.9% a year earlier and REO closings moved from 18.0% of existing home closings in April 2015 to 18.9% in April 2016.