In June, there was a fall year-over-year in new home closings in the Minneapolis-St. Paul, MN market, and the percentage decline, which was steeper than May 2016, gave suggestions that the market may be worsening. Closings slumped 8.7% from a year earlier to 428. In comparison, new home closings in the same month last year saw a 1.8% drop year-over-year in May.
A total of 4,743 new homes were sold during the 12 months that ended in June, down from 4,784 for the year that ended in May.
New home closings made up 5.3% of overall housing closings. A year ago, 5.5% of total closings were new home closings. After remaining steady in May from a year earlier, closings of new and existing homes declined year-over-year in June.
Pricing and Mortgage Trends
In June, the average per-unit price of new homes fell by 6.8% year-over-year to $390,740. This drop follows a move from $428,865 per unit to $430,018 from May 2015 to May 2016.
Average mortgage size on new homes dropped year-over-year in contrast to new home prices. In June 2016, the average mortgage size on newly sold homes saw a 5.1% drop from a year earlier. Average mortgage size rose 2.1% in May 2016 from a year earlier.
Other Market Trends
As a percentage of new home closings, attached unit closings have climbed from last year while single-family home closings have dropped. The share of new home closings belonging to attached units increased from 11.3% of closings in June 2015 to 15.7% of closings in June 2016. At the same time, the share belonging to single-family homes fell to 84.3% of closings from 88.7% of closings.
There was a 9.3% fall year-over-year in the average unit size of newly sold homes to 2,451 square feet in June 2016. In May, the average size of new homes sold went from 2,763 square feet a year earlier to 2,542 square feet.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in June, but did not look to be a burden on the market. Together, foreclosures plus REO closings accounted for 10.0% of existing home closings, down from 12.3% a year earlier. The percentage of existing home closings involving foreclosures went from 5.0% in June 2015 to 4.2% in June 2016 and REO closings as a percentage of existing home closings dropped to 5.7% from 7.3% a year earlier.