Closings of new homes fell year-over-year in January in the Chattanooga, TN market, and the percentage decline that was steeper than December 2015 gave implications of worsening market conditions. There was a 26.7% fall in new home closings from a year earlier. This came on the heels of a 24.5% fall year-over-year in December.
A total of 458 new homes were sold during the 12 months that ended in January, down from 466 for the year that ended in December.
New home closings accounted for 3.2% of overall housing closings. This is a fall 4.2% of closings a year earlier. Closings of new and existing homes slid year-over-year in January after also falling in December year-over-year.
Pricing and Mortgage Trends
Average price of newly sold homes saw a 4.7% decline year-over-year in January to $289,975 per unit. This drop follows a move from $307,256 per unit to $305,610 from December 2014 to December 2015.
Average mortgage size on new homes declined year-over-year in contrast to new home prices. It dropped 5.1% in January from a year earlier, reaching $245,568. In December 2015, average mortgage size declined 4.6% 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. The share of new home closings belonging to single-family homes gained from 90.0% in January 2015 to all of closings in January 2016. Meanwhile, attached units as a percentage of all new home closings declined to no part of closings from 10.0% of closings.
Foreclosures and real estate owned (REO) closings fell in January from a year earlier, but stayed a drag on the market. Together, foreclosures plus REO closings made up 27.7% of existing home closings, down from 36.3% a year earlier. The percentage of existing home closings involving foreclosures stayed at 13.6% of closings in January from a year earlier while REO closings as a percentage of existing home closings dropped to 14.1% from 22.7% a year earlier.