The number of homes purchased by non-U.S. residents has sunk like a stone for five straight years and just tumbled to a new low, according to a National Association of Realtors report released Monday.
International buyer purchases of U.S. single-family homes nosedived 289% in the past five years, the real estate trade group reported. Between April 2016 and March 2017, there were 284,500 such buyers. But in the time spanning April 2021 and March 2022, 98,600 non-U.S. residents purchased a home.
Some of the decline can be attributed to fewer Chinese nationals purchasing homes. Five years ago, Chinese nationals made up 14% of the international home sales. From last April to March of this year, they were responsible for 6% of such buys. Home purchases began declining before COVID-19, and they have sharply fell since.
“Among the top six foreign buyers, purchases decreased only among Chinese buyers,” the report asserted. “However, China was still the largest foreign buyer in terms of the dollar volume of the homes purchased.”
International buyers made up approximately $59 billion, or 2.6%, of the $2.3 trillion sales volume during the April 2021 to March 2022 time period studied.
International buyer data is arguably important for a couple of reasons.
For one, international buyers are more likely to be investors, as opposed to owner occupants. NAR reported that 44% of the 98,600 homes purchased were either investments, to be rented out, or to be used as a vacation home. This compares to 17% of all homes purchased by U.S. homebuyers that are not intended as a primary residence.
Also, international buyers are more likely to pay in cash. In the April 2021 to March 2022 period analyzed, 44% of all foreign buyers paid cash compared to 24% of U.S. buyers.
The data comes from a survey that the trade group has conducted each year since 2009 of its member real estate agents. NAR asks members how many homebuyers are foreign buyers. These buyers are defined as “non-citizens with permanent residences outside the U.S.”
Also included as part of the arguably expansive definition: “Immigrants within the last two years” and “Non-immigrant visa holders who reside for more than 6 months in the U.S. for professional, educational or other reasons.”
NAR then weights the responses to the surveys.
Using this methodology, April 2021 to March 2022 stood out as the lowest year for the number of foreign purchases in the survey’s 13-year history.
Also notable is that in the past two years, Canada and Mexico overtook China as the countries with the most international buyers. Of the 98,600 homes purchased, 11% of the buyers came from Canada, 8% from Mexico and 6% from China.
The Canadian buyers were perhaps interested in the U.S.’s less Canadian-like environs. Twenty-four percent of the Canada buyers bought a home in Florida, 11% California and 8% in Texas.