Foreign Buyers’ Home Purchases in U.S. Decline

Property purchases from foreign buyers in the U.S. dropped 27% year over year in March 2021.

According to NAR’s 2021 Profile of International Transactions in U.S. Residential Real Estate, foreign buyers purchased $54.4 billion of U.S. homes from April 2020 through March 2021, the height of the coronavirus pandemic. This is the fourth year inn a row the purchasing power dropped. NAR defined foreign buyers as a non-U.S. citizen with a permanent residence outside the U.S. or a non-U.S. citizen who are recent immigrants or on a non-immigrants with a visa.

Foreign buyers purchased only 107,000 properties during that period, a 31% drop from the previous year. This is lowest number of properties and lowest amount of money spent by foreign buyers on U.S. properties in a decade. Foreign buyers represented 1.8% of existing home sales and 2.8% of existing home sale dollars.

However, foreign buyers who are purchasing are spending more. The median purchase price for foreign buyers was $351,800, compared to $305,500 median for all U.S. properties. Foreign buyers were also more likely to pay all cash for the transaction and use the home as a vacation home, rental or both. Nine percent of foreign buyers bought homes that were $1 million or more, compared to 6% of all buyers. The majority of foreign buyes bought a detached single-family home (65%), followed by a condo (14%) and a townhouse (11%). The majority of foreign buyers bought in the suburbs (49%), followed by a city (28%).

Where are international buyers coming from? The highest percentage hail from Canada at 8%, followed by Mexico at 7% and China at 6%. Pennsylvania was the sixth most popular state to purchase a home in by UK buyers, who represent 4% of international buyers.

Like most American buyers, the top reason foreign buyers did not purchase a property was because they could not find one to purchase, said 46% or due to the cost of the house (38%).