In February, there was a decline year-over-year in new home closings in the Detroit, MI market, and the percentage fall was more severe than January 2016, indicating the market may be worsening. There was a 63.5% drop in new home closings from a year earlier. This followed a 48.5% drop year-over-year in January.
A total of 1,870 new homes were sold during the 12 months that ended in February, down from 1,957 for the year that ended in January.
As a percentage of overall housing closings, new home closings made up 1.2%. This is down from the 3.0% of closings a year earlier. Following a year-over-year decline in January, closings of new and existing homes also sank year-over-year in February.
Pricing and Mortgage Trends
The average price of new homes was $364,095 per unit in February, up 26.3%from a year earlier. This gain is better than the 9.6% rise in January year-over-year.
The average mortgage size on newly sold homes increased year-over-year along with the average price of new homes. It grew to $304,968 in February, a 22.4% boost. In January 2016, average mortgage size on newly sold homes saw a 12.2% gain year-over-year from a year earlier.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. Single-family home closings jumped from 34.3% of new closings in February 2015 to 44.0% of closings in February 2016. Meanwhile, attached units as a percentage of all new home closings fell to 56.0% of closings from 65.7% of closings.
There was a 12.0% fall year-over-year in the average unit size of newly sold homes to 2,150 square feet in February 2016. This decline was opposite the price lift, a pattern also seen in January 2016 when the average size of newly sold homes slid 9.6% to 2,300 square feet. The average size of newly sold homes moved from 2,545 square feet in January 2015 to 2,300 square feet in January 2016.
Foreclosures and real estate owned (REO) closings declined in February from a year earlier, but stayed a drag on the market. Foreclosures and REO closings, taken together, represented 38.0% of existing closings, lower than 40.8% a year earlier. The percentage of existing home closings involving foreclosures sank to 13.7% in February from 17.5% a year earlier and REO closings moved from 23.3% of existing home closings in February 2015 to 24.2% in February 2016.