Foreign investment in the U.S. housing market saw an explosion of growth from last year as it surged to an all-new high.
This increase was fueled by an increase in sales dollar volume from Canadian buyers, but transactions grew in all five of the top countries, according to the 2017 Profile of International Activity in U.S. Residential Real Estate report from the National Association of Realtors.
This annual survey of residential real estate purchases from international buyers showed nearly half of all foreign sales were made in three states: Florida, California and Texas.
Between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153 billion in residential property. This is an increase of 49% from 2016’s $102.6 billion, and surpasses 2015’s $103.9 billion as the new survey high.
Overall, foreign buyers purchased 284,455 residential properties, NAR’s report showed. This is up a significant 32% from 2016 and accounted for 10% of the dollar volume of existing home sales.
“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” NAR Chief Economist Lawrence Yun said. “While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest.”
China remained the top country for sales dollar volume for the fourth consecutive year. However, the reason for the sudden explosion in growth was a hike in activity from Canadian buyers. Transactions from Canadians increased from $8.9 billion last year to $19 billion in this survey, a new high for Canada.
“Inventory shortages continue to drive up U.S. home values, but prices in five countries, including Canada, experienced even quicker appreciation,” Yun said. “Some of the acceleration in foreign purchases over the past year appears to come from the combination of more affordable property choices in the U.S. and foreigners deciding to buy now knowing that any further weakening of their local currency against the dollar will make buying more expensive in the future.”
The median sales price among foreigners came in at $302,290, an increase of 9% from last year’s $277,380. This is more than the median home price of all existing homes, which stands at $235,792 for the same period. About 10% of foreign buyers paid more than $1 million, and 44% of sales were all-cash purchases.