International purchases of US homes slid to the lowest levels since the Great Recession as a strong dollar makes prices too steep for many.
(Bloomberg) — International purchases of US homes slid to the lowest levels since the Great Recession as a strong dollar makes prices too steep for many.
Foreigners acquired $53.3 billion in US residential properties in the 12 months through March, down 9.6% from a year earlier, according to a report out Tuesday from the National Association of Realtors. The number of homes purchased by foreigners was the lowest in data going back to 2009.
The US housing market saw demand from abroad fade as the nation shut its borders to international travel in the early days of the pandemic. As the country reopened, the housing market took off — and for international buyers, a strong dollar made properties even more expensive. The average price paid by foreigners reached a record high of about $640,000.
“I was expecting foreign buyers to come back now that the Covid situation is mostly solved,” said Lawrence Yun, chief economist at NAR. “But the strong dollar didn’t contribute to that.”
Florida was the most sought-out destination among international buyers, representing nearly one in four properties sold in the period. More than half of all Canadian buyers and four out of five Colombian buyers also bought real estate in the Sunshine State.
Both Texas and Florida have grabbed a bigger share of the international market in the last five years. California’s share has fallen slightly since 2018, though it remained the favorite destination for buyers from China, Hong Kong and Taiwan — who made up some 13% of all foreign buyers, more than double the share a year earlier.
The report also offered insights into the spending power of international buyers. About 42% of foreigners paid in cash, compared to one in four buyers overall during the same period.
Non-residents accounted for 56% of all money spent by foreigners on US property in the period, the report said. Half of all international buyers purchased a property to be used as a vacation home or a rental, or both. Overall, foreign buyers were responsible for some 2.3% of the dollar value of US existing-home sales in the 12 months through March.
The NAR survey was conducted online between April 3 and May 8, and received responses from about 7,400 realtors.
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