International buyers spent $59 billion on U.S. residential properties between April 2021 and March 2022, up 8.5% from the same period a year earlier, but that doesn’t translate into more homes purchased, according to a report from the National Association of Realtors.
Like all buyers in the U.S. housing market, foreign buyers are facing higher prices, and the number of transaction was down 7.9%, the lowest since the National Association of Realtors began tracking international buyer sales in the U.S.
The National Association of Realtors cites restrictions and general caution tied to international travel during the pandemic among the reasons.
Florida is the top state for residential sales to foreign buyers, including those from Latin America.
“They go to Miami, which is considered the financial hub for Latin American countries. And then you have Chinese and Europeans who want to go to Florida for vacation as a second home destination. And then you have California with the proximity to the Asian countries,” said Lawrence Yun, chief economist at the National Association of Realtors.
Florida ranks No. 1 for the 14th straight year, accounting for 24% of transactions, followed by 11% for California. After California, foreign investors bought in Texas, Arizona, New York and North Carolina.
D.C. is an international city, but it doesn’t rank very high for international buyers.
“The diplomatic core is renting. D.C. has a large transient population. People come in, and work for two years before being reassigned elsewhere. So it may be more related to renting rather than purchasing,” Yun said.
Virginia is in the top 10 for buyers from Mexico. Virginia and Maryland are both in the top five for buyers from Colombia. Virginia also ranks No. 10 among states for total foreign-buyer purchases.
China was the largest foreign buyer in terms of the dollar volume of homes purchased in that 12-month span. Buyers from China purchased $6.1 billion in real estate. The average price of a residential property purchased by a Chinese buyer was $1 million.
But measured by number of homes purchased, Canada remains the top country or origin, at 11%, followed by Mexico, with China sliding to third place. By region, Latin American buyers, including those from Mexico, are the largest group of buyers
China, Canada, India, Mexico and Brazil were the top five countries of origin for U.S. residential sales volume.
All-cash sales accounted for 44% of international-buyer transactions, nearly twice the rate of all existing home sales. Nearly seven out of 10 Canadian buyers paid all cash, the highest among foreign buyers.
Nearly half of foreign buyers buy in the suburbs, and 44% purchased the home for use as a vacation home, rental property or both.
Read the full National Association of Realtors 2022 International Transactions in U.S. Residential Real Estate report.
