There was a rise in closings of new homes in the Phoenix, AZ market in March year-over-year, and the percentage gain was sharper than February 2016, hinting that the market may be strengthening. There was a 35.9% climb in new home closings from a year earlier. In comparison, new home closings in the same month last year saw a 10.2% climb year-over-year in February.
A total of 12,032 new homes were sold during the 12 months that ended in March, up from 11,717 for the year that ended in February.
Out of all housing closings, new home closings made up 10.8%. This is better than the 8.4% of closings a year earlier. Closings of new and existing homes gained year-over-year in March after also rising in February year-over-year.
Pricing and Mortgage Trends
The average per-unit price of newly sold homes rose year-over-year to $334,383 in March, up 3.0% from last year. This bump is better than the 2.3% lift in February year-over-year.
For newly sold homes, the average mortgage size slid year-over-year in contrast to average price of new homes. In March 2016, the average mortgage size on newly sold homes saw a 1.0% fall from a year earlier. It went from $274,312 to $276,330 from February 2015 to February 2016.
Other Market Trends
Closings of attached units, as a percentage of new home closings, have risen from last year while closings of single-family homes have dipped. The share of new home closings belonging to attached units jumped from 5.6% of closings in March 2015 to 8.6% of closings in March 2016. At the same time, the share belonging to single-family homes sank to 91.4% of closings from 94.4% of closings.
For all new homes sold, the average unit size slid 6.9% year-over-year to 2,305 square feet in March 2016. This fall was opposite the price boost, a pattern also seen in February 2016 when the average size of newly sold homes dropped 6.1% to 2,338 square feet. The average size of newly sold homes moved from 2,491 square feet in February 2015 to 2,338 square feet in February 2016.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in March, but did not look to be a burden on the market. Combined, foreclosures plus REO closings represented 12.7% of existing home closings, below 15.4% a year earlier. The percentage of existing home closings involving foreclosures sank to 4.7% in March from 6.6% a year earlier and REO closings moved from 8.8% of existing home closings in March 2015 to 8.0% in March 2016.