In the Detroit, MI market, closings of new homes dropped year-over-year in September, and there were signals the market may be weakening with a percentage decline steeper than August 2015. Closings slid 50.2% from a year earlier to 109. This was after the housing market saw a 40.5% fall year-over-year in August.
A total of 1,841 new homes were sold during the 12 months that ended in September, down from 1,951 for the year that ended in August.
Out of all housing closings, new home closings accounted for 1.7%. This is down from the a year earlier when new home closings made up 3.0% of total closings. Closings of new and existing homes dropped year-over-year in September after also falling in August year-over-year.
Pricing and Mortgage Trends
The average price of new homes grew year-over-year in September to $330,054 per unit, a rise of 13.2%. This bump is higher than the 9.8% lift in August year-over-year.
Average mortgage size on new homes gained year-over-year along with new home prices. The average mortgage size rose to $278,214 in September, marking a 8.8% hike compared with a year earlier. In August 2015, average mortgage size on newly sold homes saw a 6.1% decline from a year earlier.
Other Market Trends
As a percentage of new home closings, attached unit closings have climbed from last year while single-family home closings have dropped. The share of new home closings belonging to attached units rose from 58.4% of closings in September 2014 to 60.6% of closings in September 2015. At the same time, the share belonging to single-family homes slid to 39.4% of closings from 41.6% of closings.
The average unit size of newly sold homes slid 18.0% year-over-year to 2,243 square feet in September 2015. For newly sold homes, an average size decline contrasting with an average price gain was also seen in August 2015 when the average size of newly sold homes declined 8.9% to 2,290 square feet. In August, the average size of new homes sold went from 2,515 square feet a year earlier to 2,290 square feet.
Foreclosures and real estate owned (REO) closings declined in September from a year earlier, but remained a burden on the market. Combined, foreclosures plus REO closings accounted for 31.5% of existing home closings, below 33.1% a year earlier. The percentage of existing home closings involving foreclosures went from 13.9% in September 2014 to 13.0% in September 2015 and REO closings moved from 19.2% of existing home closings in September 2014 to 18.5% in September 2015.