New home closings in the Memphis, TN market dropped year-over-year in February, and there were signs of worsening market conditions as the percentage fall was steeper than January 2016. Closings dropped 63.4% from a year earlier to 30. This came on the heels of a 36.4% fall year-over-year in January.
A total of 765 new homes were sold during the 12 months that ended in February, down from 817 for the year that ended in January.
New home closings made up 1.9% of overall housing closings. This is down from the 5.3% of closings a year earlier. Closings of new and existing homes remained steady in February after falling in January year-over-year.
Pricing and Mortgage Trends
Average price of newly sold homes saw a 3.9% lift year-over-year in February to $240,161 per unit. This gain compares to a 6.4% decline in January from a year earlier.
The average mortgage size on new homes moved north year-over-year along with new home prices. In February 2016, average mortgage size increased 4.2% from a year earlier to $209,756. In January 2016, average mortgage size on newly sold homes saw a 9.2% fall from a year earlier.
Other Market Trends
As a share of new home closings, single-family home closings have climbed from last year while the share belonging to attached units has fallen. Single-family home closings rose from 98.8% of new closings in February 2015 to all of closings in February 2016. Meanwhile, attached units as a percentage of all new home closings declined to no part of closings from 1.2% of closings.
The average unit size of newly sold homes gained 8.7% year-over-year to 2,923 square feet in February 2016. The lift was sharper than the surge in average price of newly sold homes, making the movement simliar to January 2016 when the average size increased 28.2% to 1,873 square feet from a year earlier. In January, the average size of new homes sold went from 2,610 square feet a year earlier to 1,873 square feet.
Foreclosures and real estate owned (REO) closings continued to increase in February from a year earlier and stayed a drag on the market. Combined, foreclosures plus REO closings accounted for 44.8% of existing home closings, above 37.1% a year earlier. The percentage of existing home closings involving foreclosures rose to 24.6% in February from 18.9% a year earlier while REO closings as a percentage of existing home closings gained to 20.2% from 18.2%.