NAR: International Activity in U.S. Residential Real Estate Market Declines
August 30, 2018
Rising home prices and low inventory led to a decline in foreign home purchases in the United States, according to the National Association of Realtor’s 2018 Profile of International Transactions in U.S. Residential Real Estate.
Total international sales totaled $121 billion during April 2017 to March 2018, a 21 percent decline from the previous 12-month period, according to the annual survey.
NAR found that foreign buyers and recent immigrants accounted for 8 percent of the $1.6 trillion existing home sales, a decrease from 10 percent during the 12-month period that ended March 2017.
“After a surge in 2017, we saw a decrease in foreign activity in the housing market in the latest year, bringing us closer to the levels seen in 2016,” said Lawrence Yun, NAR chief economist. “Inventory shortages continue to drive up prices and sustained job creation and historically low interest rates mean that foreign buyers are now competing with domestic residents for the same, limited supply of homes.”
Chinese Lead in Purchases
Five countries accounted for nearly half (49 percent) of the dollar volume of purchases by foreign buyers: China, Canada, India, Mexico and the United Kingdom. For the sixth consecutive year, China exceeded all other countries in dollar volume of purchases, buying an estimated $30.4 billion worth of residential property, a decrease of 4 percent from last year. Buyers from Canada came in second, with $10.5 billion worth of property, showing a more significant decline of 45 percent from the 2017 survey reference period, followed by the U.K., $7.3 billion, India, $7.2 billion and Mexico, $4.2 billion.
The survey once again showed that foreign buying activity is mostly limited to three states, as Florida (19 percent), California (14 percent) and Texas (9 percent) remained the top three destinations for foreign buyers to purchase, followed by Arizona and New York (both 5 percent).
The number of units purchased by international buyers saw a slight decrease, from 284,000 in the previous 12-month period to 266,800. China, once again, purchased the greatest number of units at 40,400. Canada comes next with 27,400 units, followed by Mexico (20,200), India (13,100) and the U.K. (9,000).
Contact ALTA at 202-296-3671 or [email protected].