By Michele Lerner
August 3, 2022 at 5:30 a.m. EDT
Pandemic-related travel restrictions and a slowdown in international travel contributed to foreign purchases of existing homes in the U.S. to decline between April 2021 and March 2022, while domestic purchases rose.
A recent report from the National Association of Realtors (NAR) found that the number of existing homes bought by international buyers dropped to under 100,000 (98,600) during that period, the lowest number since 2009 and down 7.9 percent from the period between April 2020 and March 2021. Overall, 6.2 million existing homes were sold in 2021, the highest number since 2006, according to NAR.
At the same time, the amount of money invested by foreign buyers in U.S. existing homes rose 8.5 percent between April 2021 and March 2022 compared to that same period the previous year, up to $59 billion. That increase ended a three-year decline in the amount of foreign investment in the U.S. existing home market.
The gap between sales figures and monetary investment can be explained this way: Both the average ($598,200) and median ($366,100) purchase prices for international buyers were the highest ever recorded by NAR. The average sales price was 17.7 percent higher than the previous year and the median sales price was 4.1 percent higher.
International buyers include foreign buyers living in the U.S. as recent immigrants or with visas allowing them to live in the U.S., along with foreign buyers living overseas. Foreign buyers living in the U.S. accounted for 58 percent of the dollar volume of purchases ($34.1 billion), while those living overseas accounted for 42 percent ($24.9 billion).
By dollar volume, the top five countries for international purchases of existing homes in the U.S. include China, Canada, India, Mexico and Brazil. Chinese buyers had the highest average purchase price at just above $1 million.
China and Canada have been the top two countries with the most buyers purchasing property in the U.S. since 2013.
The top states for international buyer purchases were Florida, California, Texas, Arizona, New York and North Carolina. Nearly one-quarter (24 percent) of all international purchases made in the U.S. were in Florida, followed by California (11 percent), Texas (8 percent) and Arizona (7 percent). New York and North Carolina were tied at four percent. Florida has been at the top of the list of international buyers for 14 consecutive years. Nearly a third of Chinese buyers purchased existing homes in California.
While home sales are anticipated to decline this year because of higher mortgage rates, purchases by foreign buyers are expected to increase. Many foreign buyers (44 percent) paid for their homes with cash, compared to 24 percent of all existing-home buyers. International buyers living overseas were even more likely to buy with cash (60 percent), compared with 30 percent of foreign buyers living in the U.S.
For the full report, click here.