Closings of new homes in the Philadelphia, PA market declined year-over-year in May, and the percentage fall was steeper than April 2016, suggesting the market may be worsening. New home closings saw a decline of 17.7% from the year earlier to 311. This came after a 11.2% decline year-over-year in April.
A total of 4,888 new homes were sold during the 12 months that ended in May, down from 4,955 for the year that ended in April.
Out of all housing closings, new home closings represented 3.8%. This is down from the a year earlier when new home closings accounted for 5.0% of total closings. For new and existing homes, closings rose year-over-year in May after also increasing in April year-over-year.
Pricing and Mortgage Trends
In May, the average per-unit price of new homes fell by 2.7% year-over-year to $426,051. This drop follows a move from $438,313 per unit in April 2015 to $436,445 in April 2016.
The average mortgage size on newly sold homes saw a drop year-over-year in contrast to new home prices. In May 2016, average mortgage size declined 4.0% from a year earlier to $318,807. In April 2016, average mortgage size on newly sold homes saw a 3.4% rise year-over-year from a year earlier.
Other Market Trends
Closings of attached units, as a percentage of new home closings, have risen from last year while closings of single-family homes have slumped. Attached unit closings increased from 49.5% of all closings in May 2015 to 54.0% of closings in May 2016. Meanwhile, single-family home closings as a percentage of all new home closings fell to 46.0% of closings from 50.5% of closings.
The average unit size of newly sold homes went from 2,573 square feet in May 2015 to 2,581 square feet in May 2016. In April 2016, the average size of newly sold homes dropped 29.2% from the year earlier. The average size of newly sold homes moved from 2,553 square feet in April 2015 to 1,808 square feet in April 2016.
Foreclosures and real estate owned (REO) closings continued to increase in May from a year earlier and remained a burden on the market. Together, foreclosures plus REO closings made up 25.9% of existing home closings, up from 23.4% a year earlier. The percentage of existing home closings involving foreclosures rose to 15.0% in May from 12.3% a year earlier and REO closings moved from 11.1% of existing home closings in May 2015 to 10.9% in May 2016.