- Foreign buyers purchased 98,600 homes, down by 7.9% compared to the previous year, and the lowest since the GFC
- Chinese bueyrs averaged just over a million
- Florida remains the most popular state for foreign buyers
US$59 (AU$86) billion worth of US existing homes were purchased by foreign buyers from April 2021 to March 2022, ending a three-year slide in foreign investment in US residential real estate.
The findings, which come from a new report by the National Association of Realtors (NAR), found there was an 8.5% increase from April 2021 through to March 2022 compared to the previous period.
However, the number of homes purchased overall still declined. Foreign buyers purchased 98,600 homes, down by 7.9% compared to the previous year. This represents the fewest number of homes since 2009, amid the Global Financial Crisis.
Despite this, overall existing home sales in the US totalled 6.12 million in 2021, representing the highest annual level since 2006.
“For the second year in a row, restrictions and general caution tied to international travel during the pandemic slowed home buying by wealthier foreign buyers,” said NAR Chief Economist Lawrence Yun.
“Even so, domestic home buying demand was exceptional and, therefore, boosted home sales nationally.”
The NAR surveyed members who transacted with international clients purchasing and selling US property during the period, and found that foreign buyers who resided as recent immigrants purchased $34.1(AU$50) billion of US existing homes.
This is a 5.2% increase from the previous year and represents 58% of the dollar volume of purchases.
Foreign buyers who lived abroad purchased $24.9 (AU$36) billion worth of existing homes, which is up 13.2% over the 12 months prior, and accounts for 42% of the dollar volume.
Overall, international buyers accounted for 2.6% of the $2.3 (AU$3.4) trillion in existing home sales during that period.
In terms of sale prices, the average (US$598,200/AU$875,970) and median (US$366,100/AU$536,270) recorded by international buyers were the highest ever since NAR began collating such data. The two values were also 17.7% and 4.1% higher than the previous year.
The increase in foreign buyer prices, the report notes, is reflective of the rise in US house prices.
Chinese buyers had the highest average purchase price, just over $1 million, with almost a third (31%) acquiring property in California.
“Affordability challenges along with the inability to find the right property were the top reasons given for prospective international buyers who showed interest but ultimately did not purchase a home in the United States,” said Mr Yun.
Chinese buyers accounted for the most US residential sales, followed by Canada.
Sales value by country of origin
|Country||Value (US/AU in billions)|
Florida, for the 14th straight year, remained the top destination for foreign buyers.
Top US destinations for foreign buyers
|State||% of Sales|
|New York and North Carolina||4%|
All-cash sales accounted for 44% of international buyer transactions – nearly twice the rate (24%) of all existing-home buyers.
Non-resident foreign buyers (60%) were twice as likely to make an all-cash purchase in comparison to resident foreign buyers (30%).
Nearly seven out of 10 Canadian buyers (69%) made all-cash purchases, the highest among foreign buyers.
Indian buyers were the least likely to make an all-cash purchase, only 9% did.
“Due to rising interest rates, overall home sales will decline in the U.S. this year. Foreign buyers, however, are likely to step up purchases, as those making all-cash offers will be immune from changes in interest rates,” Mr Yun added.
“In addition, international flights have increased in recent months with the lifting of pandemic-related travel restrictions.”
44% of foreign buyers purchased their property as a vacation home, rental property or both.
64% purchased single-family detached homes and townhouses. 46% purchased in the suburbs while 29% bought in an urban area, a similar trend to the past five years.
5% bought in a resort area, down from 17% in 2012.
“Driving economic development through our work to foster diverse and inclusive communities remains a top priority for NAR,” said Katie Johnson, NAR’s general counsel and chief member experience officer.
“Our association collaborates with groups across the country to help our members unlock and better understand the opportunities in U.S. real estate for foreign buyers, maximizing the global business potential in our local markets.”