Chinese Mandarin-Speaking Buyers Increasingly Paying All-Cash For U.S. Homes

Posted by Patrick Barnard on October 07, 2015 No Comments
Categories : Residential Mortgage

The number of home buyers who speak Mandarin Chinese increased the most of any language group between 2005 and this year – up more than 9%, according to research conducted by RealtyTrac and Ethnic Technologies, a firm that specializes in digital multicultural marketing, research, data enhancements and analysis.

In addition, the number of Mandarin Chinese-speaking home buyers paying all cash increased 229% during that same time period.

The report is based on a joint analysis of 10 million publicly recorded residential property sales deeds in 2014 and 2015 compared with 2005 by ethnicity and native language spoken.

The analysis found that 46% of Mandarin Chinese-speaking buyers who purchased U.S. homes in the 17 months ending in May paid all cash – an increase of 229%. For comparison purposes, the share of Mandarin Chinese-speaking buyers who purchased U.S. homes using all cash in 2005 was around 14%.

Among all language groups, the share of all-cash buyers increased 65% during the same time period – up from a 20% share in 2005 to a 33% share in the 17 months ended in May.

‘Cash buyers across the board are playing a much bigger role in the housing market now than they were 10 years ago, and that is particularly true for Chinese Mandarin-speaking cash buyers, who are more likely to be foreign nationals,’ says Daren Blomquist, vice president of RealtyTrac, in a statement. ‘Foreign cash buyers have helped to accelerate U.S. home price appreciation over the past few years, given that these buyers are often not as constrained by income as local, traditionally financed buyers.

‘Markets with a higher share of foreign cash buyers may expect to see a stronger upside in the short term, given the continued global economic instability,’ Blomquist adds. ‘But those markets are also more susceptible to a downside in the longer term when demand from foreign cash buyers dries up.’

Of course, the percentage of foreign buyers varies considerably from market to market.

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