New home closings slid year-over-year in February in the Houston, TX market, and the percentage fall, which was steeper than January 2016, gave suggestions of weakening market conditions. Closings slumped 9.4% from a year earlier to 1,688. This followed a 7.4% fall year-over-year in January.
A total of 25,235 new homes were sold during the 12 months that ended in February, down from 25,410 for the year that ended in January.
Out of all housing closings, new home closings represented 21.9%. A year ago, 21.5% of total closings were new home closings. Closings of new and existing homes dropped year-over-year in February after also falling in January year-over-year.
Pricing and Mortgage Trends
The average price of new homes jumped year-over-year 2.0% in February to $315,887 per unit. This bump is smaller than the 6.2% lift in January year-over-year.
Average mortgage size on new homes grew year-over-year along with new home prices. It gained 2.3% in February from a year earlier to $272,897. In January 2016, average mortgage size on newly sold homes saw a 6.4% lift year-over-year 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 dipped. The share of new home closings belonging to attached units climbed from 1.7% of closings in February 2015 to 2.7% of closings in February 2016. Meanwhile, single-family home closings as a percentage of all new home closings declined to 97.3% of closings from 98.3% of closings.
For all new homes sold, the average unit size increased 9.3% year-over-year to 3,102 square feet in February 2016. In January, the average size of new homes sold went from 2,856 square feet a year earlier to 2,938 square feet. An increase in both the average size and price of newly sold homes was also seen in January 2016 when the average size grew 2.9% to 2,938 square feet.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in February, but did not look to be a burden on the market. Together, foreclosures plus REO closings accounted for 16.1% of existing home closings, down from 17.8% a year earlier. The percentage of existing home closings involving foreclosures went from 9.0% in February 2015 to 8.3% in February 2016 and REO closings moved from 8.7% of existing home closings in February 2015 to 7.8% in February 2016.