International buyers bought $59 billion worth of residential properties in the United States from April 2021 to March 2022, an increase of 8.5% over the previous year which ended a three-year streak down, according to a report by the National Association of Realtors.
The report examines US residential real estate transactions with international buyers. As travel bans continue to lift and international tourism begins to rebound, rising prices for foreign buyers are offsetting the annual decline in homes sold in terms of overall dollar volume.
The median price to buy a home among foreign buyers was $366,100, compared to the median price of $355,700 for all existing homes sold in the United States.
Lawrence Yun, chief economist for the National Association of Realtors, said there was a slight increase in dollar volume from a year earlier, reflecting high home prices in the United States.
“There are foreigners coming into the market or real estate agents who specialize in working with foreign buyers,” he said. “So, [the report] just gives more color to the picture in the US real estate market and that there are foreign buyers in the US”
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The study found that despite rising house prices, American single-family homes were still more affordable than the cost of a property in a central business district in other countries. For example, a house in Hong Kong might cost $28,570 per square meter, but a house in San Francisco would only cost $8,250 per square meter.
Most foreign buyers, 74%, bought a single-family home or townhouse, while 46% of foreign buyers bought a home in a suburban area. Forty-four percent of overseas buyers also bought a property to use as a vacation home, rental or both.
Yun said US properties are cheaper due to multiple major cities and higher metropolitan markets. Where the United States has several cities like New York, San Francisco and Los Angeles, other countries have only a few, like Sydney with Australia or Paris with France.
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The report found that the top state destinations for foreign home buyers were Florida, Texas and California.
“(These locations) attract more people, but Florida generally attracts second home buyers, California because of its proximity to Asian countries, especially China and India…and Texas has a creative market. jobs fast, so you see a lot of foreign companies opening factories there,” Yun said.
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Yun also said that the overall concern in the U.S. housing market for overseas buyers is that mortgage rates have shot up so quickly in such a short time, which has made it difficult for people to afford to buy. Looming fears of a recession are also worrying homebuyers about possible job cuts, which Yun hopes will not happen.
“For my overall outlook with the housing market, I hope mortgage rates will start to stabilize and with mortgage rates stabilizing, we may be moving away from overheated market conditions to more normalized conditions,” a- he declared.
This article originally appeared on USA TODAY: Foreign home buyers bought $59 billion worth of properties in the United States