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After a three-year period where foreign investment declined in U.S. residential real estate, foreign investment increased 8.5% on a year-over-year basis from April 2021 through March 2022. According to the National Association Realtors (NAR), foreign buyers purchased $59 billion worth of U.S. existing homes during the 12-month period. The total amount of properties purchased by foreign buyers—98,600— represented a 7.9% year-over-year decrease and the fewest total number of homes bought since the NAR began tracking data in 2009.

“For the second year in a row, restrictions and general caution tied to international travel during the pandemic slowed home buying by wealthier foreign buyers,” says NAR chief economist Lawrence Yun. “Even so, domestic home buying demand was exceptional and, therefore, boosted home sales nationally.”

According to the NAR, existing-home sales totaled 6.12 million in 2021 in the U.S., the highest annual level since 2006.

The NAR’s research indicates foreign buyers who resided in the U.S. as recent immigrants or who were holding visas that allowed them to live in the U.S. purchased $34.1 billion worth of U.S. existing homes, a 5.2% increase from the prior-year period. Foreign buyers who lived abroad purchased $24.9 billion in existing homes in the U.S., a 13.2% increase from the previous 12-month period. From April 2021 through March 2022, international buyers accounted for 2.6% of the $2.3 trillion in existing home sales, according to the NAR.

Over 40% of foreign buyers purchased properties in the U.S. for use as a vacation home, rental property, or both. However, only 5% of foreign buyers bought a property in a resort area, down from 17% as recently as 2012. Approximately two-thirds of international buyers purchased detached single-family homes and townhouses, and nearly half purchased homes in the suburbs.

The average ($598,200) and median ($366,100) existing home sales prices among international buyers were the highest ever recorded by the NAR. The increase in prices partly reflects the overall price appreciation in the U.S., as monthly average existing-home sales prices rose 10% to $374,300 during the April to March period. Chinese buyers had the highest average purchase price at just over $1 million, and nearly one-third of Chinese buyers purchased property in California.

“Affordability challenges along with the inability to find the right property were the top reasons given for prospective buyers who showed interest but ultimately did not purchase a home in the United States,” says Yun.

China ($6.1 billion), Canada ($5.5 billion), India ($3.6 billion), Mexico ($2.9 billion), and Brazil ($1.6 billion) represented the top five foreign countries in terms of U.S. residential sales dollar volume. Florida remained the top destination for foreign buyers for the 14th consecutive year, accounting for nearly a quarter of all international purchases. California, Texas, Arizona, New York, and North Carolina were also top destinations for foreign buyers from April 2021 through March 2022.

Cash sales accounted for 44% of international buyer transactions, nearly twice the rate of all existing-home buyers, according to the NAR. Non-resident foreign buyers were twice as likely to make an all-cash purchase compared with resident foreign buyers. Nearly 70% of Canadian buyers made all-cash purchases while Indian buyers were the least likely to pay all-cash.

“Due to rising interest rates, overall home sales will decline in the U.S. this year. Foreign buyers, however, are likely to step up purchases, as those making all-cash offers will be immune from changes in interest rates,” Yun says. “In addition, international flights have increased in recent months with the lifting of pandemic-related travel restrictions.”