A new report from the National Association of Realtors found foreign buyers purchased $53.3 billion worth of U.S. existing homes from April 2022 through March 2023, falling 9.6% from the previous 12-month period. Foreign buyers purchased 84,600 properties, down 14.2% from the prior year. This was the least number of homes bought since 2009, when the national Realtor association began tracking this data.
"Sharply lower housing inventory in the U.S. and higher borrowing costs across the world have dented international buyers for two straight years," said NAR chief economist Lawrence Yun. "However, recovering international travel following the end of the pandemic will bring more foreign transactions in coming months and years."
NAR's "2023 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 2022 through March 2023. During the time period, the survey found foreign buyers residing in the U.S. as recent immigrants or who hold visas that allow them to live in the U.S. purchased $23.4 billion worth of U.S. existing homes, down 31.4% from the prior year. Foreign buyers who lived abroad purchased $29.9 billion worth of existing homes, up 20% from the prior year.
Among international buyers, the average home sale price of $639,900 and median home sale price of $396,400 were the highest ever recorded by NAR – at 7% and 8.3% higher, respectively, than the previous year. The increase in prices of homes purchased by foreign buyers reflects the increase in U.S. home prices, as the median sales price for all U.S. existing homes was $384,200.
At $1.23 million, Chinese buyers had the highest average purchase price, with a third (33%) purchasing property in California. China and Canada remained first and second in U.S. residential sales dollar volume at $13.6 billion and $6.6 billion, respectively. Mexico ($4.2 billion), India ($3.4 billion) and Colombia ($0.9 billion) rounded out the top five.
"Home purchases from Chinese buyers increased after China relaxed the world's strictest pandemic lockdown policy, while buyers from India were helped by the country's strong GDP growth," said Yun. "A stronger Mexican peso against the U.S. dollar likely contributed to the rise in sales from Mexican buyers."
According to the report, for the 15th consecutive year Florida was the top destination for foreign buyers, accounting for 23% of all international purchases. California and Texas tied for second (12% each), followed by North Carolina, Arizona and Illinois (4% each).
Cash sales continue to dominate nearly half of international purchases. All-cash sales made up 42% of international buyer transactions compared to 26% of all homebuyers. Two-thirds of Colombian buyers (67%) made all-cash purchases. This was the highest share among the top five foreign buyer nations. Canadian buyers came in second at 51%, followed by Chinese cash buyers at 47%. Just 15% of Asian Indian buyers paid all cash.
Half of foreign buyers purchased their property for use as a vacation home, rental property, or both – up from 44% the previous year. Almost three out of five international buyers (59%) purchased single-family homes.
"In California, Realtors find most foreign buyers purchase homes here so their children can attend school. It's well-known that high schools and higher education institutions in California are among the best in the nation," said Jimmy Kang, chair of the Silicon Valley Association of Realtors (SILVAR) Global Business Council.
Kang said NAR has partnerships with over 100 real estate organizations across 77 countries. "SILVAR has served as NAR's global ambassador association to the Chamber of Real Estate & Builders' Associations (CREBA) in the Philippines since 2012. These partnerships provide opportunities for Realtors here in the U.S. to connect with global real estate professionals and international investors."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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