New home closings dropped year-over-year in August in the Iowa City, IA market, and the percentage decline was steeper than July 2015, suggesting the market may be worsening. New home closings saw a 31.0% decline from a year earlier to 20. This came after a 19.3% drop year-over-year in July.
A total of 283 new homes were sold during the 12 months that ended in August, down from 292 for the year that ended in July.
New home closings made up 7.6% of overall housing closings. This is down from the 10.0% of closings a year earlier. After rising year-over-year in July, closings of new and existing homes declined year-over-year in August.
Pricing and Mortgage Trends
The average price of new homes sank by 11.3% year-over-year to $287,435 per unit in August. This drop compares to a 5.6% rise in July year-over-year.
Average mortgage size on new homes declined year-over-year in contrast to new home prices. It dropped 13.2% in August from a year earlier to $227,341. In July 2015, average mortgage size gained 7.4% from a year earlier.
Other Market Trends
As a percentage of new home closings, attached unit closings have gained from last year while single-family home closings have dropped. Attached unit closings rose from 3.4% of all closings in August 2014 to 20.0% of closings in August 2015. Conversely, the share belonging to single-family homes sank to 80.0% of closings from 96.6% of closings.
For all new homes sold, the average unit size fell 4.4% year-over-year to 1,632 square feet in August 2015. In July, the average size of new homes sold went from 1,690 square feet a year earlier to 1,715 square feet.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in August, but did not appear to be dragging the market. Together, foreclosures plus REO closings accounted for 6.2% of existing home closings, down from 9.2% a year earlier. The percentage of existing home closings involving foreclosures declined to 2.1% in August from 6.1% a year earlier while REO closings as a percentage of existing home closings climbed to 4.1% from 3.1%.