This article is from the Australian Property Journal archive
FOREIGNERS purchased more than US$42 billion worth of homes in the United States in the year to end of March, marking a 21.2% year-on-year fall as a strong greenback made homes dearer.
A new report from the National Association of Realtors (NAR) showed international buyers purchased 54,300 properties, a figure that was 36% lower than the previous year’s 84,600, and the fewest number of homes bought since 2009, when NAR began tracking data – and a long way from the 284,500 purchased in 2017.
Overall, US existing home sales in the year to March totalled 4.09 million in 2023, down 18.7% from 2022, and the lowest level since 1995.
“The strong US dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners,” said NAR chief economist Lawrence Yun.
“Therefore, it’s not surprising to see a pullback in US home sales from foreign buyers.”
NAR’s 2024 International Transactions in U.S. Residential Real Estate showed that foreign buyers who resided in the US as recent immigrants or who were holding visas that allowed them to live in the US purchased $22.6 billion worth of US existing homes, a 3.4% decline from the previous year and representing 54% of the dollar volume of purchases.
The greater fall was seen in the total value of homes foreign buyers who lived abroad purchased, slumping 35% to $19.4 billion.
International buyers accounted for 2% of the $2.1 trillion in total US existing home sales during that period.
“Historically low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike,” Yun said.
The average existing home sale price ($780,300) and median ($475,000) among international buyers were the highest ever recorded by NAR – and 21.9% and 19.8% higher, respectively, than the prior year.
The increase reflected the overall price increase for all US existing homes, which climbed to $392,600.
At $1.3 million, Chinese buyers had the highest average purchase price, and a quarter of those buyers purchased property in California. In total, 18% of international buyers purchased properties worth more than $1 million.
Canada led all countries of origin in the share of foreign buyer purchases of US existing homes at 13%, followed by China and Mexico (11% each), and India (10%).
China ranked highest in US residential sales dollar volume at $7.5 billion, continuing a trend that has run since 2013. Canada ($5.9 billion), India ($4.1 billion), Mexico ($2.8 billion) and Colombia ($0.7 billion) rounded out the top five.
Florida on top again
Florida remained the top destination for foreign buyers for the 16th consecutive year, accounting for 20% of all international purchases.
Next were Texas (13%) and California (11%), followed by Arizona (5%), and Georgia, New Jersey, New York and North Carolina (4% each).
All-cash sales accounted for half of international buyer transactions compared to 28% of all existing home buyers. Non-resident foreign buyers (68%) were more likely to make an all-cash purchase than resident foreign buyers (36%).
More than two-thirds of Canadian (69%) and Chinese (68%) buyers made all-cash purchases, the highest shares among the top foreign buyer nations.
