The Detroit, MI market saw a drop in new home closings year-over-year in June, and the percentage decline was steeper than May 2016, suggesting the market may be worsening. New home closings saw a decline of 50.9% from the year earlier to 109. This came after a 35.2% decline year-over-year in May.
A total of 1,833 new homes were sold during the 12 months that ended in June, down from 1,946 for the year that ended in May.
Of the total number of closings, new home closings made up 2.0%. A year ago, 1.4% of total closings were new home closings. For new and existing homes, closings slid in June after also declining in May year-over-year.
Pricing and Mortgage Trends
The average price of new homes jumped year-over-year 4.6% in June to $338,995 per unit. This surge is an improvement over the 2.9% gain in May year-over-year.
For newly sold homes, the average mortgage size saw a gain year-over-year along with new home prices. In June 2016, the average mortgage size was $282,600, a 4.4% bump from a year earlier. In May 2016, average mortgage size jumped 12.0% from a year earlier.
Other Market Trends
The percentage of new home closings belonging to single-family homes has risen from last year while the portion of new home closings belonging to attached units has dropped. The share of new home closings belonging to single-family homes gained from 50.5% in June 2015 to 56.9% of closings in June 2016. Meanwhile, attached units as a percentage of all new home closings dropped to 43.1% of closings from 49.5% of closings.
For all new homes sold, the average unit size jumped 4.6% year-over-year to 2,526 square feet in June 2016. The average size of newly sold homes moved from 2,524 square feet in May 2015 to 2,321 square feet in May 2016.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in June, but did not appear to be dragging the market. Out of all existing home closings, foreclosures combined with REO closings made up 23.4% of closings, below 63.3% a year earlier. The percentage of existing home closings involving foreclosures declined to 9.3% in June from 55.9% a year earlier while REO closings as a percentage of existing home closings increased to 14.1% from 7.4%.