Foreign homebuyers are back in the U.S. real estate market.
Buyers who are not U.S. citizens accounted for $59 billion worth of home purchases in the 12 months through March, a 9% jump from a year earlier and the first increase in three years, according to a report from the National Association of Realtors.
The average price of a home purchased by a foreign buyer jumped 18% to nearly $600,000, with the increase pushing up the total dollar volume even as the number of existing homes sold slipped to the lowest level since 2009, according to NAR.
Among foreign buyers, 44% paid cash, compared to 24% among all purchases.
Home prices in the U.S. surged during the pandemic, as a shortage of properties to buy combined with low mortgage rates to fuel bidding wars across the country. Lately, there have been signs that things are cooling off as the faltering economy and higher borrowing costs keep more potential buyers on the sidelines.
“In hindsight, it was a good thing that international buyers were absent in the past two years when the housing market boomed,” said Lawrence Yun, NAR’s chief economist. “The extra competition would have led to even greater difficulty in buying for prospective US homebuyers.”
It’s worth noting how NAR defines a foreign buyer. The report said 57% are recent immigrants who have lived in the US for less than two years or visa holders who reside here but are not citizens.
Florida was a top destination for international buyers, accounting for 24% of all foreign residential transactions.