Closings of new homes in the Detroit, MI market sank year-over-year in July, and there were hints of worsening market conditions as the percentage fall was steeper than June 2016. New home closings saw a drop of 74.5% from the year earlier to 59. This was after the housing market saw a 45.5% fall year-over-year in June.
A total of 1,675 new homes were sold during the 12 months that ended in July, down from 1,847 for the year that ended in June.
Out of all housing closings, new home closings represented 2.1%. A year ago, 2.8% of total closings were new home closings. Following a year-over-year decline in June, closings of new and existing homes also declined year-over-year in July.
Pricing and Mortgage Trends
The average price of new homes went from $302,468 in July 2015 to $303,292 in July 2016. This followed a 5.2% bump in June year-over-year.
Average mortgage size on new homes declined year-over-year in contrast to new home prices. In July 2016, average mortgage size slid 6.2% from a year earlier to $248,713. Average mortgage size rose 5.8% in June 2016 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 grew from 45.0% of new closings in July 2015 to 49.2% of closings in July 2016. Meanwhile, attached units as a percentage of all new home closings declined to 50.8% of closings from 55.0% of closings.
There was a 20.1% decline year-over-year in the average unit size of newly sold homes to 1,766 square feet in July 2016. In June, the average size of new homes sold went from 2,414 square feet a year earlier to 2,494 square feet.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in July, but did not appear to be dragging the market. Out of all existing home closings, foreclosures combined with REO closings represented 17.4% of closings, below 27.3% a year earlier. The percentage of existing home closings involving foreclosures dropped to 6.5% in July from 11.2% a year earlier while REO closings as a percentage of existing home closings declined to 10.8% from 16.1% a year earlier.