In May, the Detroit, MI market saw a fall year-over-year in new home closings, and the market seemed to be worsening in light of the percentage decline steeper than April 2016. New home closings saw a 57.8% fall from a year earlier to 76. In comparison, new home closings in the same month last year saw a 56.8% decline year-over-year in April.
A total of 1,956 new homes were sold during the 12 months that ended in May, down from 2,060 for the year that ended in April.
New home closings accounted for 1.5% of overall housing closings. This is down from the a year earlier when new home closings represented 2.6% of total closings. Closings of new and existing homes dropped year-over-year in May after also falling in April year-over-year.
Pricing and Mortgage Trends
The average price of newly sold homes jumped year-over-year 2.4% in May to $343,274 per unit. This boost follows a move from $308,931 per unit to $311,395 from April 2015 to April 2016.
For newly sold homes, the average mortgage size saw a lift year-over-year along with new home prices. In May 2016, average mortgage size gained 5.2% from a year earlier to $292,414. In April 2016, average mortgage size on newly sold homes saw a 3.2% fall 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 rose from 47.2% in May 2015 to 56.6% of closings in May 2016. Conversely, the share of new home closings belonging to attached units fell to 43.4% of closings from 52.8% of closings.
There was a 10.7% decline year-over-year in the average unit size of newly sold homes to 2,267 square feet in May 2016. In April, the average size of new homes sold went from 2,619 square feet a year earlier to 2,401 square feet.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in May, but did not look to be a burden on the market. Foreclosures and REO closings, taken together, made up 23.5% of existing closings, lower than 28.5% a year earlier. The percentage of existing home closings involving foreclosures declined to 8.4% in May from 13.0% a year earlier and REO closings moved from 15.4% of existing home closings in May 2015 to 15.1% in May 2016.