Closings of new homes dropped year-over-year in August in the Madison, WI market, but the percentage decline was less than that of July 2015, hinting that the market may be strengthening. There was a 38.6% fall in new home closings from a year earlier. In comparison, new home closings in the same month last year saw a 50.6% drop year-over-year in July.
A total of 486 new homes were sold during the 12 months that ended in August, down from 508 for the year that ended in July.
Out of all housing closings, new home closings accounted for 3.6%. This is down from the a year earlier when new home closings made up 5.6% of total closings. After rising year-over-year in July, closings of new and existing homes declined year-over-year in August.
Pricing and Mortgage Trends
The average price of new homes increased year-over-year in August to $337,565 per unit, a rise of 15.5%. This gain is an improvement over the 8.3% hike in July year-over-year.
For newly sold homes, the average mortgage size gained year-over-year along with new home prices. In August 2015, there was a 10.1% lift in the average mortgage size, reaching $270,031. In July 2015, average mortgage size rose 8.4% 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 climbed from 73.7% in August 2014 to 82.9% of closings in August 2015. Meanwhile, attached units as a percentage of all new home closings fell to 17.1% of closings from 26.3% of closings.
There was a 17.0% fall year-over-year in the average unit size of newly sold homes to 1,612 square feet in August 2015. This drop was opposite the price bump, a pattern also seen in July 2015 when the average size of newly sold homes dropped 22.5% to 1,528 square feet. In July, the average size of new homes sold went from 1,972 square feet a year earlier to 1,528 square feet.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in August, but did not look to be a burden on the market. Foreclosures and REO closings, taken together, made up 6.3% of existing closings, lower than 8.8% a year earlier. The percentage of existing home closings involving foreclosures went from 3.4% in August 2014 to 3.2% in August 2015 and REO closings as a percentage of existing home closings sank to 3.0% from 5.3% a year earlier.