In May, the Washington, DC market saw a drop year-over-year in new home closings, but compared with April 2016, the percentage drop was less steep, hinting the market may be strengthening. Closings dropped 3.6% from a year earlier to 845. This followed a 5.8% decline year-over-year in April.
A total of 11,136 new homes were sold during the 12 months that ended in May, down from 11,168 for the year that ended in April.
As a percentage of overall housing closings, new home closings represented 8.6%. This is down from the a year earlier when new home closings made up 9.6% of total closings. For new and existing homes, closings increased year-over-year in May after also increasing in April year-over-year.
Pricing and Mortgage Trends
In May, the average price for new home closings was $506,511, a 10.6% decline from last year. This fall is larger than the 2.6% decline in April from a year earlier.
The average mortgage size on newly sold homes saw a drop year-over-year in contrast to new home prices. The average mortgage size declined to $436,309 in May, marking a 6.7% fall compared with last year. In April 2016, average mortgage size slid 1.2% 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. Single-family home closings jumped from 45.2% of new closings in May 2015 to 47.0% of closings in May 2016. At the same time, the share of new home closings belonging to attached units declined to 53.0% of closings from 54.8% of closings.
There was a 19.0% fall year-over-year in the average unit size of newly sold homes to 2,474 square feet in May 2016. A decrease in both the average size and price of newly sold homes was also seen in April 2016 when the average size climbed 11.6% to 2,772 square feet. The average size of newly sold homes moved from 3,137 square feet in April 2015 to 2,772 square feet in April 2016.
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 accounted for 11.9% of existing home closings, down from 15.3% a year earlier. The percentage of existing home closings involving foreclosures declined to 4.5% in May from 6.4% a year earlier while REO closings as a percentage of existing home closings slid to 7.4% from 8.8% a year earlier.
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