Even though foreign buyers purchased $54.4 billion worth of U.S. real estate from April 2020 through March 2021, the pandemic caused a significant decline in home-buying activity from international buyers.
That’s according to a report from the National Association of Realtors that said the number of properties purchased by international buyers, 107,000, fell 31% last year after the pandemic. In fact, sales volume was down 27% — the lowest on records going back to 2011. Declines were particularly strong for foreign buyers who live abroad, down 33%.
The 2021 Profile of International Transactions in U.S. Residential Real Estate report surveyed Realtors about transactions with international clients who purchased and sold U.S. residential property.
“The big decline in foreign purchases of homes in the U.S. in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions,” said NAR Chief Economist Lawrence Yun. “Yet, even with the absence of foreign buyers, the U.S. housing market strengthened solidly.”
Here’s a closer look at the foreign buyers who purchased real estate in the U.S.
What are international buyers’ countries of origin?
The top countries of origin for foreign buyers, in terms of the number of homes purchased, are Canada, Mexico, China, India and the United Kingdom, respectively.
In terms of dollar volume, China was the largest foreign buyer at $4.5 billion. Canada was second at $4.2 billion with India ($3.1 billion), Mexico ($2.9 billion) and the United Kingdom ($2.7 billion) rounding out the top five.
Conversely, most U.S. clients are looking to buy in Mexico, Canada, China and Costa Rica.
Where do international buyers want to live?
Florida is the most popular destination with a share of 21% of foreign buyers.
“Florida consistently ranks No. 1 in terms of attracting foreign buyers,” Yun said.
California comes in second with 16% of foreign buyers. Texas is third with 9% and is followed by Arizona at 5%. Other states on the top 10 list were New Jersey, New York, North Carolina, Ohio, Georgia and Michigan.
Utah was not listed in the report as a major destination for foreign buyers.
Florida was the most popular state for buyers from Canada and the United Kingdom. Texas had the greatest share of buyers from Mexico while California had the most buyers from China and India.
What’s the forecast for international buyers?
Some foreign buyers who wanted to purchase homes within the past year were unable to do so. Along with the problems posed by the pandemic, the lack of housing options was listed as the top reason why international clients decided not to make a purchase. The cost also held people back.
“As travel restrictions loosen and foreign students return to U.S. colleges in the upcoming year, there is likely to be some growth in foreign buying of U.S. real estate,” Yun said. “High home prices and the ongoing lack of inventory could, however, pose a challenge for buyers.”
Yun expects, however, that the housing situation will continue to improve. He says the global economic recovery is underway, and he expects an increase in housing starts and slower home price appreciation in 2022.
“In 2022, we don’t anticipate a super-heated market,” he said. “We hope that price appreciation matches people’s income growth so it could be about 3% growth in the price appreciation. Right now, the dollar has been slightly weakening recently and maybe this is an attractive draw for many foreigners who want to buy here in the U.S.”
To see the report on international transactions, visit NAR.Realtor. To learn more about real estate in your own community, contact a local Realtor. A directory of Utah Realtors is available at UtahRealtors.com.