In May, the Madison, WI market saw a drop year-over-year in new home closings, but the percentage fall was not as steep as April 2016, suggesting that the market may be evening out. There was a 9.6% decline in new home closings from a year earlier. This came on the heels of a 26.3% fall year-over-year in April.
A total of 431 new homes were sold during the 12 months that ended in May, down from 436 for the year that ended in April.
Of the total number of closings, new home closings made up 3.9%. A year earlier, new home closings made up 4.4% of total closings. Closings of new and existing homes climbed year-over-year in May following a drop in April year-over-year.
Pricing and Mortgage Trends
The average price of newly sold homes slid 4.4% year-over-year in May to $329,902 per unit. This drop compares to a 6.3% boost in April year-over-year.
Average mortgage size on new homes slid year-over-year in contrast to new home prices. Average mortgage size dropped 7.1% to $269,039 in May from a year earlier. Average mortgage size grew 5.1% in April 2016 from a year earlier.
Other Market Trends
Closings of attached units, as a percentage of new home closings, have grown from last year while closings of single-family homes have fallen. The share of new home closings belonging to attached units jumped from 5.8% of closings in May 2015 to 17.0% of closings in May 2016. At the same time, the share belonging to single-family homes dropped to 83.0% of closings from 94.2% of closings.
The average unit size of newly sold homes fell 11.6% year-over-year to 1,641 square feet in May 2016. In April, the average size of new homes sold went from 2,212 square feet a year earlier to 2,042 square feet.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in May, but did not appear to be dragging the market. Combined, foreclosures plus REO closings represented 7.2% of existing home closings, below 8.1% a year earlier. The percentage of existing home closings involving foreclosures went from 3.0% in May 2015 to 2.6% in May 2016 and REO closings moved from 5.1% of existing home closings in May 2015 to 4.5% in May 2016.