Closings of new homes in the Detroit, MI market declined year-over-year in December, but there were hints the market may be evening out from a percentage decline less than November 2015. There was a 49.4% decline in new home closings from a year earlier. This came on the heels of a 51.0% fall year-over-year in November.
A total of 1,878 new homes were sold during the 12 months that ended in December, down from 1,994 for the year that ended in November.
New home closings made up 2.2% of overall housing closings. As a part of the whole, new home closings were 3.0% a year earlier. For new and existing homes, closings declined in December after also declining in November year-over-year.
Pricing and Mortgage Trends
In December, there was a 20.3% hike year-over-year in the average price of newly sold homes, reaching $356,558 per unit. This surge is higher than the 13.2% boost in November year-over-year.
There was a gain year-over-year in the average mortgage size on new homes along with new home prices. In December 2015, the average mortgage size was $286,875, up 13.6% from a year earlier. In November 2015, average mortgage size gained 10.4% from a year earlier.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. The share of new home closings belonging to single-family homes jumped from 28.5% in December 2014 to 38.7% of closings in December 2015. At the same time, the share of new home closings belonging to attached units fell to 61.3% of closings from 71.5% of closings.
There was a 4.0% fall year-over-year in the average unit size of newly sold homes to 2,400 square feet in December 2015. The average size of newly sold homes moved from 2,490 square feet in November 2014 to 2,729 square feet in November 2015.
Foreclosures and real estate owned (REO) closings decreased in December from a year earlier, but stayed a drag on the market. Combined, foreclosures plus REO closings made up 38.1% of existing home closings, below 47.6% a year earlier. The percentage of existing home closings involving foreclosures rose to 14.3% in December from 10.1% a year earlier while REO closings as a percentage of existing home closings declined to 23.9% from 37.5% a year earlier.