The Memphis, TN market saw a drop in new home closings year-over-year in August, and with a percentage drop steeper than July 2015, there were signs the market may be worsening. New home closings saw a 53.5% fall from a year earlier to 40. This came after a 10.1% fall year-over-year in July.
A total of 832 new homes were sold during the 12 months that ended in August, down from 878 for the year that ended in July.
As a percentage of overall housing closings, new home closings represented 1.6%. This is down from the 4.7% of closings a year earlier. For new and existing homes, closings rose year-over-year in August after also increasing in July year-over-year.
Pricing and Mortgage Trends
Average price of newly sold homes had a 7.9% bump year-over-year to $234,652 per unit in August. This gain is smaller than the 9.1% lift in July year-over-year.
Average mortgage size on new homes climbed year-over-year along with new home prices. In August 2015, the average mortgage size was $210,377, up 13.1% from a year earlier. Average mortgage size jumped 13.2% in July 2015 from a year earlier.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. Single-family home closings increased from 95.3% of new closings in August 2014 to 97.5% of closings in August 2015. Conversely, the share of new home closings belonging to attached units declined to 2.5% of closings from 4.7% of closings.
The average unit size of newly sold homes gained 12.7% year-over-year to 2,627 square feet in August 2015. An increase was also seen in July 2015 when the average size of new homes sold climbed 16.7% to 2,726 square feet. The average size of newly sold homes moved from 2,335 square feet in July 2014 to 2,726 square feet in July 2015.
Foreclosures and real estate owned (REO) closings continued to increase in August from a year earlier and remained a drag on the market. Combined, foreclosures plus REO closings accounted for 36.2% of existing home closings, above 35.6% a year earlier. The percentage of existing home closings involving foreclosures dropped to 14.8% in August from 20.1% a year earlier while REO closings as a percentage of existing home closings increased to 21.4% from 15.5%.