Real Estate

Foreign buyers flee the U.S. housing market, led by Chinese and British

Top states for foreign purchases were Florida, California and Texas

China’s currency controls, as well as international tensions between the U.S. and a slew of countries traditionally thought of as our allies, are putting a crimp on America’s real estate market by thwarting demand from foreign homebuyers. 

Purchases by Chinese people, the biggest share of foreign buyers, plummeted 56% in the 12 months ended in March, while British home purchases tumbled 48%, according to a report from the National Association of Realtors. Chinese people bought $13.4 billion of American homes during the 12 months ended in March, compared with $30.4 billion a year earlier. 

Canadians, the next-largest group of foreign buyers, purchased $8 billion of homes, compared with $10.5 billion a year earlier. Buyers from India were No. 3, with $6.9 billion of purchases, down from $7.2 billion. The U.K. was No. 4, but saw the second-biggest decline: Brits purchased $3.8 billion of homes, down from $7.3 billion a year earlier. Mexico was No. 5, at $2.3 billion, a decline of 45% from $4.2 billion a year earlier.

Measuring all foreign purchases, the total dollar volume plummeted 36% to $77.9 billion, according to the report. Foreign buyers paid a median price of $280,600, about 8% higher than the median for all existing homebuyers.  

The rankings of the states that got the biggest share of foreign purchases remained the same as in past years: Florida was first, followed by California, Texas, Arizona and New Jersey. 

Other tidbits from the report include: 41% of foreign buyers paid all-cash, compared with about 20% for the overall market. Also, 76% of foreigners purchased a single-family home or townhome, and 44% purchased a property in a suburban area. 

Purchases from foreign buyers who reside abroad accounted for 1.4% of all existing home sales in the 12 months ended in March, down from 1.9% in the year-earlier period, according to the NAR report. That type of foreign buyer – whose primary residence is in another country – represented about 40% of foreign home purchases, the report said.

The bigger share – 60% – were buyers who either were recent immigrants or foreigners who live in the U.S. for work, school or other reasons. While only 25% of non-resident foreign buyers used a mortgage for the purchase, about 67% of resident foreign buyers got a mortgage, according to the report. The rest paid in cash.

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