NAR: Home Sales To Non-Resident Foreigners See Slowdown

Posted by Patrick Barnard on July 06, 2016 No Comments
Categories : Residential Mortgage

The number of non-resident foreigners buying single-family homes in the U.S. decreased during the past year but remains elevated compared with the pre-crisis years, according to a report from the National Association of Realtors (NAR).

The firm’s Profile of International Activity in U.S. Residential Real Estate report shows that between April 2015 and March of this year, foreign buyers purchased $102.6 billion of residential property – down slightly compared with $103.9 billion for the same period one year prior.

About 214,885 properties were purchased by non-resident foreigners during that same period – an increase of 2.3% compared with the previous year – however, the average value of the properties purchased decreased somewhat.

NAR attributes the slowdown in investment by foreign buyers as a sign that economic growth is waning in many countries. It also attributes the slowdown to higher home prices.

According to the report, Chinese buyers purchased more U.S. homes than any other foreign nationality for a fourth year in a row. Chinese buyers exceeded all countries by dollar volume of sales at $27.3 billion, which was a slight decrease from last year’s survey ($28.6 billion) but more than triple the total dollar volume of sales from Canadian buyers (ranked second at $8.9 billion).

Chinese buyers purchased the most housing units for the second consecutive year (29,195, down from 34,327 in 2015) and also typically bought the most expensive homes at a median price of $542,084.

“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence combined to present significant challenges for foreign buyers over the past year,” says Lawrence Yun, chief economist for NAR, in a statement. “While these obstacles led to a cool-down in sales from non-resident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.

“Both the increase in U.S. home prices – up six percent in March 2016 compared to one year ago – and the depreciating value of foreign currencies against the U.S. dollar made buying property a lot pricier last year,” Yun adds. “Led by Venezuela (45 percent) and Brazil (24 percent), at least eight countries, including China and Canada, saw double-digit-percent increases in the median sales price of a U.S. existing home when measured in their country’s currency.”

About half of all home purchases by non-resident foreign buyers during the past year were all-cash, according to the report.

Register here to receive our Latest Headlines email newsletter


Leave a Comment