In the Grand Rapids, MI market, closings of new homes sank year-over-year in July, and the percentage fall, which was steeper than June 2016, gave signs of weakening market conditions. There was a 56.5% decline in new home closings from a year earlier. This came after a 46.6% decline year-over-year in June.
A total of 513 new homes were sold during the 12 months that ended in July, down from 548 for the year that ended in June.
New home closings made up 1.9% of overall housing closings. This is a decline 3.8% of closings a year earlier. Following a year-over-year decline in June, closings of new and existing homes also dropped year-over-year in July.
Pricing and Mortgage Trends
The average price of newly sold homes gained year-over-year 10.1% in July to $255,135 per unit. This surge is an improvement over the 10.1% bump in June year-over-year.
The average mortgage size on newly sold homes saw a drop year-over-year in contrast to new home prices. It sank to $196,791 in July, a 3.9% drop. In June 2016, average mortgage size dropped 5.3% from a year earlier.
Other Market Trends
Closings of attached units, as a percentage of new home closings, have grown from last year while closings of single-family homes have fallen. Attached unit closings increased from 58.1% of all closings in July 2015 to 77.8% of closings in July 2016. Meanwhile, single-family home closings as a percentage of all new home closings sank to 22.2% of closings from 41.9% of closings.
For all new homes sold, the average unit size slid 46.1% year-over-year to 1,059 square feet in July 2016. This decline was opposite the price surge, a pattern also seen in June 2016 when the average size of newly sold homes fell 21.9% to 1,104 square feet. The average size of newly sold homes moved from 1,414 square feet in June 2015 to 1,104 square feet in June 2016.
Foreclosures and real estate owned (REO) closings increased in July from a year earlier and did not appear to be dragging the market. Foreclosures and REO closings, taken together, made up 14.2% of existing home closings, higher than 13.8% a year earlier. The percentage of existing home closings involving foreclosures went from 6.2% in July 2015 to 6.4% in July 2016 and REO closings moved from 7.6% of existing home closings in July 2015 to 7.8% in July 2016.