Tight inventory and restricted travel are keeping foreign home buyers away
Foreign investment in US homes was down 5% annually in April, according to a new survey by the National Association of Realtors.
Foreign buyers purchased $74 billion in existing US homes between April 2019 and March 2020, a 5% decrease from the previous 12-month period and the second straight annual decline in foreign real estate investment, NAR found. Foreign buyers purchases 154,000 properties during the period, a 16% decrease from the prior year.
Foreign buyers who lived in the US as recent immigrants or held visas allowing them to live in the country purchased $41 billion worth of existing homes – 61% of the dollar value of foreign purchases, but an 8% decrease from the prior year. Foreign buyers who lived abroad purchased $33 billion worth of homes, a 1% decrease from the previous year. Foreign buyers who lived abroad accounted for 39% of total foreign-purchase dollar volume, NAR found.
International buyers accounted for 4% of the $1.7 trillion in total existing US home sales during the period.
“Foreign buyers and recent immigrants have become less of a force in the US housing market over the last couple of years,” said Lawrence Yun, NAR chief economist. “A lack of housing inventory – the primary factor hindering domestic buyers – is also holding back some foreign buyers. Additionally, less cross-border travel, falling international trade and fewer foreign students attending American universities are impacting foreign home buyers.”
China and Canada topped the list in US residential sales dollar volume at $11.5 billion and $9.5 billion, respectively. The two countries have held the top spots since 2013. Mexico ($5.8 billion), India ($5.4 billion), and Colombia ($1.3 billion) rounded out the top five, according to NAR. China was the only country among the top five to post a decline in dollar volume over the previous year, falling from $13.4 billion to $11.5 billion. Colombia replaced the UK as the fifth-largest country of origin for foreign buyers by dollar volume.
The median sales price for existing homes purchased by foreign buyers was $314,600, 15% more than the median price of $274,600 for all existing homes sold in the US during the period. Chinese buyers paid the highest median price at $449,500. Nearly half of Chinese buyers purchased property in California or New York, NAR reported.
