In May, there was a decline year-over-year in new home closings in the Tucson, AZ market, and with a percentage decline steeper than April 2016, there were signals the market may be worsening. Closings slid 11.6% from a year earlier to 122. This came after a 4.2% decline year-over-year in April.
A total of 1,764 new homes were sold during the 12 months that ended in May, down from 1,780 for the year that ended in April.
Out of all housing closings, new home closings accounted for 5.0%. This is down from the a year earlier when new home closings made up 7.9% of total closings. For new and existing homes, closings grew year-over-year in May after also increasing in April year-over-year.
Pricing and Mortgage Trends
The average price of new homes went from $259,971 in May 2015 to $258,651 in May 2016. This followed a 2.2% decline in April from a year earlier.
The average mortgage size on new homes moved north year-over-year in contrast to new home prices. In May 2016, there was a 4.7% surge in the average mortgage size, reaching $233,169. In April 2016, average mortgage size on newly sold homes saw a 2.1% drop 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. The share of new home closings belonging to attached units increased from 4.3% of closings in May 2015 to 6.6% of closings in May 2016. Meanwhile, single-family home closings as a percentage of all new home closings slid to 93.4% of closings from 95.7% of closings.
For all new homes sold, the average unit size gained 3.8% year-over-year to 2,228 square feet in May 2016. The average size of newly sold homes moved from 2,168 square feet in April 2015 to 2,104 square feet in April 2016.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in May, but did not look to be a burden on the market. Foreclosures and REO closings, taken together, accounted for 12.4% of existing closings, lower than 19.6% a year earlier. The percentage of existing home closings involving foreclosures dropped to 5.5% in May from 9.2% a year earlier while REO closings as a percentage of existing home closings fell to 6.9% from 10.4% a year earlier.