Overseas Buyers of US Real Estate
The past several years have been volatile for all areas of the U.S. economy, but especially the real estate market, which as seen price appreciation from a low-interest rate environment. Anyone who has tried to purchase a new home in the U.S. during this time has learned what it means to be a buyer in a seller’s market, but it wasn’t as bad as it could have been.
As a result of pandemic-related travel restrictions, the true scope of potential foreign buyers into U.S. real estate was not felt. That meant less competition from wealthy, overseas cash buyers.
However, that’s beginning to change as overseas buyers of US real estate return.
According to a report by the National Association of Realtors (NAR), Non-U.S. citizens comprised $59 billion worth of home purchases in the United States from March 2021 to March 2022, a 9% increase from the previous year and the first increase in three years. 44% of these foreign buyers paid cash and the average price of homes purchased has increased by 18%, nearing $600,000.
All of this comes in the wake of a real estate environment characterized by low mortgage rates that created bidding wars, housing shortages, and price surges across the country. However, the madness may wane as interest rates rise, and an uncertain economy could sideline many potential domestic buyers.
This is good news for foreign buyers making all-cash offers because they are effectively immune from interest rate changes. As pandemic-related travel opens up, more and more foreign buyers can enter the U.S. real estate market.
Who is a foreign buyer? or overseas buyers of US real estate?
According to the NAR, a “foreign buyer” is a non-US citizen with a permanent address in another country. Moreover, 57% of these foreign buyers are non-U.S. citizens and recent immigrants who have been living stateside for less than two years or non-immigrant visa holders who have resided in the U.S. for at least six months.
Where do most foreign buyers come from?
From March 2021 to March 2022, foreign buyers living abroad spent $24.9 billion on purchasing homes in the United States, an increase of 13.2%.
Canadians have the highest share of existing home sales at 11%, followed by Mexicans (8%), Chinese (6%), Indians (5%), Brazilians (3%), and Colombians (3%).
While Chinese buyers purchased fewer homes than Canadians, the dollar value of their purchases was substantially higher, with $5.5 billion coming from Canada vs $6.1 billion from China.
Which states are they going to?
For the 14th year running, the leading location for foreign buyers was Florida, with 45% of international purchases occurring in the Sunshine State. After Florida were California (11%), Texas (8%), Arizona (7%), New York (4%), and North Carolina (4%).
As domestic buyers are on hold due to an unpredictable economy and rising interest rates, the opportunity for foreign buyers to capture great deals will also increase. If you’re considering purchasing a house in the U.S., you may want to get in early before the rest of the world scrambles to get in on the action.
Whether you want to buy/rent a residential home or invest in U.S. real estate, it is in your best interest to connect with real estate experts committed to seeing your housing dreams come true.
At America Mortgages, we leveraged decades of experience in mortgage lending to match you with our pool of lenders. Our only focus is providing market rate U.S. mortgage financing for foreign nationals and U.S. expats. No one does it better!
Contact us today at [email protected] to find your dream home or learn why you should invest in U.S. real estate market now.