Sales of U.S. homes to foreign buyers, including those from countries such as China and Canada, have reached their lowest levels in over a decade. According to a report by the National Association of Realtors, only 54,300 homes were purchased by non-U.S. citizens in the 12 months leading up to March, marking a significant decrease from the previous year.
Factors contributing to this decline include challenges such as the strong dollar, limited inventory, higher mortgage rates, and affordability issues. The housing market has been in a slump since 2022, with existing home sales dropping to a 30-year low. The average rate on a 30-year mortgage has been around 7%, affecting the purchasing power of buyers. Additionally, the supply of homes for sale remains low, leading to increased competition and higher prices.
International buyers also have to consider the impact of a strong U.S. dollar on the cost of purchasing a home. All-cash sales accounted for half of international buyer transactions, compared to 28% for all existing-home buyers. The top states where foreign buyers purchased homes include Florida, Texas, California, and Arizona.
The number of existing U.S. homes purchased by international buyers peaked in 2017, driven by Chinese nationals among others. In the most recent report, buyers from China accounted for 11% of purchases, matching Mexico, while Canadian buyers topped the list with 13%. Despite these challenges, the U.S. remains a desirable location for foreign real estate investment.
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