Foreign buyers are purchasing fewer US homes
- Foreign buyers purchased 14% fewer U.S. homes in the past year
- Chinese buyers were the largest share of foreigners who bought homes
- Florida was the most popular destination for international buyers
FILE – A for sale sign is posted in front of a home in Sacramento, Calif., Thursday, March 3, 2022. The Federal reserve is expected at its meeting this week to raise its key interest rate by a substantial three-quarters of a point for the third consecutive time. Another hike that large would lift its benchmark rate — which affects many consumer and business loans — to a range of 3% to 3.25%, the highest level in 14 years.(AP Photo/Rich Pedroncelli, File)
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(NewsNation) — Foreign buyers purchased fewer U.S. homes for the sixth consecutive year despite a post-pandemic uptick among Chinese buyers, according to a new report.
From April 2022 to March 2023, international buyers purchased 84,600 residential properties in the U.S., down 14% from the year before, the National Association of Realtors (NAR) found. That’s the fewest number of U.S. homes bought by foreign buyers since NAR began tracking the data in 2009.
Rising mortgage rates and tight supply have cooled the housing market broadly but NAR Chief Economist Lawrence Yun said foreign buyers are facing two additional challenges.
“The U.S. dollar was much stronger…which makes the property much more expensive,” he said. “The second reason is that international travel is still not back up to pre-COVID (levels).”
Yun expects international buying activity to increase in next year’s report as pandemic-related factors continue to ease.
There’s some evidence that’s already starting to happen, particularly for buyers from China where COVID restrictions were especially stringent.
After dropping to 6% during the pandemic, Chinese buyers made up 13% of all foreign buyers for the year that ended in March — topping all other countries.
About half of all foreign buyers during the latest period were recent immigrants or foreigners who lived in the U.S., while the other half lived outside the country, NAR found.
Overall, foreign buyers accounted for a small fraction — just 2.3% — of all U.S. existing-home sales as measured by dollar volume.
That proportion has continued to trend down over the past six years.
In 2017, for example, foreign buyers made up 10% of all existing home sales in terms of dollars.
Chinese buyers bounce back
Chinese buyers purchased $13.6 billion of existing homes in the U.S., accounting for about 25% of total sales for all foreign buyers from April 2022 to March 2023.
That’s more than double the amount Chinese buyers spent the year prior but well below the $30 billion worth of properties they purchased in both 2017 and 2018.
Due to the country’s large population and growing economy, Yun thinks Chinese home-buying activity will pick up in the years ahead.
Buyers from Mexico and Canada accounted for 11% and 10% of the U.S. homes purchased by foreigners. Foreign buyers from India (7%) and Colombia (3%) rounded out the top five.
Florida is the top landing spot
Foreign buyers’ home purchases tend to be heavily concentrated in a few states, and this year was no different.
For the 15th year in a row, Florida was the top destination, accounting for 23% of all international purchases.
California had the second-largest foreign buyer share at 12%. Texas came in third, also at 12% — a significant jump from 8% the year before.
North Carolina and Arizona were the fourth and fifth most popular destinations, and each accounted for 4% of all foreign buyer purchases.
Destinations varied depending on where the foreign buyer was from. Chinese and Indian buyers were most likely to purchase property in California, whereas Canadians and Colombians flocked to Florida.
Texas was the most popular destination for buyers from Mexico.
