International buyers purchased $59 billion worth of U.S. residential properties from April 2021 to March 2022, an 8.5% increase from the previous year that broke a three-year streak of declines, a report by the National Association of Realtors found.
The report looks at U.S. residential real estate transactions with international buyers. As travel bans continue to lift and international tourism starts to rebound, rising foreign buyer purchase prices offset the annual decline in homes sold in terms of overall dollar volume.
The median home purchase price among foreign buyers was $366,100, compared to the median price of $355,700 of all U.S. existing homes sold.
Lawrence Yun, a chief economist with the National Association of Realtors, said there is a slight dollar volume increase from the previous year, which reflects the high home prices in the U.S. He said with people traveling more, he anticipates more foreign purchases.
“There are some foreigners coming into the market or some realtors who specialize working with foreign buyers," he said. "So, (the report) just gives the picture more added color about the U.S. real estate market and that there are some foreign buyers in the U.S.”
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The study found that despite rising housing prices, U.S. single-family homes were still more affordable than the cost of a property in a central business district in other countries. For example, a home in Hong Kong could be priced at $28,570 per square meter, but a home in San Francisco would only be $8,250 per square meter.
Most foreign buyers, 74%, purchased a detached single-family home or townhome while 46% of foreign buyers purchased a home in a suburban area. Forty-four percent of foreign buyers also purchased a property to use as a vacation home, rental, or both.
Yun said U.S. properties are cheaper because of the multiple major cities and higher metro markets. Where the U.S. has multiple cities like New York City, San Francisco and Los Angeles, other countries only have a few, such as Sydney with Australia or Paris with France.
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The report found that the top state destinations for foreign homebuyers were Florida, Texas and California.
“(These locations) capture more people, but Florida generally draws the second homebuyers, California because of its proximity to Asian countries, especially China and India ... and Texas has a fast job-creating market so you see many foreign companies opening up factories there,” Yun said.
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Yun also said the overall concern in the U.S. housing market with respect to foreign buyers is that mortgage rates have climbed so fast in such a short period of time, leading people to be unable to afford to buy. Looming fears of a recession also have homebuyers worried about potential job cuts, which Yun said he hopes won’t happen.
“For my overall perspective with the housing market, hopefully, mortgage rates begin to stabilize and with stabilization in the mortgage rates, maybe we are moving away from superheated market conditions to a more normalized one,” he said.
This article originally appeared on USA TODAY: Foreign home buyers purchased $59 billion of U.S. properties