Closings of new homes in the Boston, MA market dropped year-over-year in February, and there were signals the market may be worsening with a percentage drop steeper than that of January 2016. New home closings saw a 62.8% drop from a year earlier to 35. This came after a 42.5% drop year-over-year in January.
A total of 1,161 new homes were sold during the 12 months that ended in February, down from 1,220 for the year that ended in January.
Out of all housing closings, new home closings made up 0.9%. This is down from the a year earlier when new home closings represented 3.2% of total closings. Closings of new and existing homes grew year-over-year in February after also rising in January year-over-year.
Pricing and Mortgage Trends
The average price of new homes slid by 1.9% year-over-year to $561,138 per unit in February. This drop is a drop off from the 13.5% decline in January from a year earlier.
The average mortgage size on newly sold homes moved south year-over-year in contrast to new home prices. The average mortgage size declined to $396,680 in February, marking a 13.8% fall compared with last year. In January 2016, average mortgage size on newly sold homes saw a 3.0% fall from a year earlier.
Other Market Trends
The share of new home closings made up by attached units has risen while the share belonging to single-family homes has fallen. Attached unit closings jumped from 46.8% of all closings in February 2015 to 60.0% of closings in February 2016. Conversely, the share belonging to single-family homes fell to 40.0% of closings from 53.2% of closings.
For all new homes sold, the average unit size increased 3.7% year-over-year to 2,600 square feet in February 2016. The average size of newly sold homes moved from 2,540 square feet in January 2015 to 2,373 square feet in January 2016.
Foreclosures and real estate owned (REO) closings rose in February from a year earlier and did not look to be a burden on the market. Foreclosures and REO closings, taken together, accounted for 21.9% of existing home closings, higher than 19.8% a year earlier. The percentage of existing home closings involving foreclosures rose to 11.5% in February from 9.7% a year earlier and REO closings moved from 10.1% of existing home closings in February 2015 to 10.4% in February 2016.