Foreign buyers purchased $54.4 billion worth of U.S. existing homes from April 2020 through March 2021, a 27% decrease from the previous 12-month period and the fourth consecutive annual decline in foreign investment in U.S. residential real estate, according to a new report from the National Association of Realtors®. Foreign buyers purchased 107,000 properties, down 31% from the prior year, as the COVID-19 pandemic led to a strong global economic contraction and a decline in international tourist and business arrivals. The dollar and sales volumes are the lowest since 2011, when those figures were $66.4 billion and 210,800 properties, respectively.
NAR’s 2021 Profile of International Transactions in U.S. Residential Real Estate surveyed members about transactions with international clients who purchased and sold U.S. residential property from April 2020 through March 2021. Foreign buyers who resided in the U.S. as recent immigrants or who were holding visas that allowed them to live in the U.S. purchased $32.4 billion worth of U.S. existing homes, a 21% decrease from the prior year and representing 60% of the dollar volume of purchases. Foreign buyers who lived abroad purchased $22 billion worth of existing homes, down 33% from the 12 months prior and accounting for 40% of the dollar volume. International buyers accounted for 2.8% of the $5.8 trillion in existing-home sales during that time period.
“The big decline in foreign purchases of homes in the U.S. in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions,” said NAR Chief Economist Lawrence Yun. “Yet, even with the absence of foreign buyers, the U.S. housing market strengthened solidly.”
China, Canada, India, Mexico and the United Kingdom were the top five countries of origin by U.S. residential sales dollar volume. The annual dollar volume for foreign buyers from China, Canada and Mexico all dropped by at least 50%.
“As travel restrictions loosen and foreign students return to U.S. colleges in the upcoming year, there is likely to be some growth in foreign buying of U.S. real estate,” Yun added. “High home prices and the ongoing lack of inventory could, however, pose a challenge for buyers.”
The median existing-home sales price among international buyers was $351,800, 15% more than the $305,500 median price for all existing homes sold in the U.S. The price difference primarily reflects the locations and type of properties desired by foreign buyers. At $476,500, Chinese buyers had the highest median purchase price, and more than a third – 34% – purchased property in California.
For the 13th straight year, Florida remained the top destination for foreign buyers, accounting for 21% of all international purchases. California ranked second (16%), followed by Texas (9%) and Arizona (5%), with New Jersey and New York tied at 4%.
Forty-three percent of foreign buyers purchased the property for primary residence use and 65% purchased detached single-family homes and townhouses. Nearly half of international buyers – 49% – purchased a home in the suburbs and 28% bought a home in an urban area, a figure that’s held steady over the last six years. Seven percent of foreign buyers bought property in a resort area, down from 17% in 2012.
Source: NAR
