In the Birmingham, AL market, closings of new homes declined year-over-year in May, and the percentage decline was more severe than April 2016, indicating the market may be worsening. New home closings saw a decline of 73.8% from the year earlier to 21. This came on the heels of a 59.4% decline year-over-year in April.
A total of 423 new homes were sold during the 12 months that ended in May, down from 482 for the year that ended in April.
New home closings made up 1.0% of overall housing closings. This is down from the 4.4% of closings a year earlier. Closings of new and existing homes increased year-over-year in May after also rising in April year-over-year.
Pricing and Mortgage Trends
Average price of newly sold homes had a 2.2% gain year-over-year to $277,215 per unit in May. This surge compares to a 20.3% fall in April from a year earlier.
Average mortgage size on new homes increased year-over-year along with new home prices. In May 2016, the average mortgage size on newly sold homes saw a 15.0% lift from a year earlier. In April 2016, average mortgage size sank 3.6% from a year earlier.
Other Market Trends
As a percentage of new home closings, attached unit closings have gained from last year while single-family home closings have dropped. Attached unit closings jumped from no part of all closings in May 2015 to 9.5% of closings in May 2016. At the same time, the share belonging to single-family homes slid to 90.5% of closings from all of closings.
For all new homes sold, the average unit size fell 5.8% year-over-year to 2,403 square feet in May 2016. In April, the average size of new homes sold went from 2,713 square feet a year earlier to 2,538 square feet.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in May, but did not appear to be dragging the market. Out of all existing home closings, foreclosures combined with REO closings represented 21.2% of closings, below 24.5% a year earlier. The percentage of existing home closings involving foreclosures sank to 9.4% in May from 14.4% a year earlier while REO closings as a percentage of existing home closings climbed to 11.9% from 10.1%.