Foreign Investment In Existing Homes Drops To $53.3B

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Foreign Investment In Existing Homes Drops To $53.3B

Aug 9, 2023 | News | 0 comments

International purchasers bought $53.3 billion in U.S. homes from April 2022 to March 2023, per National Association of Realtors. According to the 2023 “International Transactions in U.S. Residential Real Estate” report, foreigners bought 84,600 properties, down 14.2% yearly and marking the lowest since tracking began in 2009. This aligns with a 17.8% national drop in home sales from 2021 to 2022. Dollar amount fell 9.6% from the prior year. International buyers were 2.3% of the $2.3 trillion in home sales. NAR’s Lawrence Yun attributes the decline to limited availability.

He explained that a decline in housing inventory in the U.S. and increased global borrowing costs had impacted international buyers for consecutive years. He further noted that the revival of international travel post-pandemic would lead to a rise in foreign transactions in the upcoming months and years.

Supply scarcity pushed home prices up for both local and global buyers. NAR marked record median prices for foreign buyers: $639,900 average and $396,400 median. Average price rose 7% yearly, median 8.3% YoY. Around 15% of international buyers purchased $1 million+ homes. Chinese buyers averaged $1.23 million, driven by 33% buying in California. China topped sales at $13.6 billion, trailed by Canada’s $6.6 billion. Mexico ($4.2 billion), India ($3.4 billion), and Colombia ($0.9 billion) followed.

Yun added that an increase in home acquisitions was observed from Chinese buyers following the relaxation of China’s stringent pandemic lockdown measures. He also noted that buyers from India benefited from the robust GDP growth in their country. Additionally, the strengthened Mexican peso against the U.S. dollar was likely a contributing factor to the heightened sales activity among Mexican buyers.

Florida maintained its status as the top choice for foreign buyers, hosting 23% of international residential purchases. California and Texas each secured 12%, while Arizona, Illinois, and North Carolina captured 4% each. Foreign buyers abroad made up 56% ($29.9 billion) of the total purchase value, a 20% increase from the previous year. Recent immigrants and visa holders constituted 44% ($23.4 billion), marking a 31.4% annual decrease.