The poor economic situation is not only affecting Americans. Foreigners, too, are losing interest in investing in the United States. This is reflected, for example, in the number of homes purchased by foreign buyers.
According to the 2023 International Transaction in U.S. Residential Real Estate report released by the National Association of Realtors in August, the number of existing homes purchased by foreign investors declined by 14% in the April 2022-March 2023 period compared to the previous fiscal year. In total, foreign buyers purchased 84,600 properties: the lowest number since 2009.
2023 International Transact... by VozMedia
The total dollar volume of foreign buyer purchases also declined to $53.3 billion from April 2022 to March 2023. This is a 9.6% decrease compared to the previous year.
Although these declines are a reflection of the country's poor economy,some investors havee not lost hope and believe that the situation will improve. Lawrence Yun, chief economist for the National Association of Realtors, said:
Sharply lower housing inventory in the U.S. and higher borrowing costs across the world have dented international buyers for two straight years. However, recovering international travel following the end of the pandemic will bring more foreign transactions in the coming months and years.
Speaking of numbers, the median price of each of the homes purchased by non-U.S. buyers was $396,400, just shy of the median price of $384,200 for all U.S. existing homes sold.
Chinese lead in purchases
The National Association of Realtors revealed in its report the ratio of investors by nationality. Surprisingly, Chinese investors - including those from Taiwan and Hong Kong- were the most active buyers in the U.S. real estate market.
They invested a total of $13.6 billion in home purchases, accounting for 13% of all foreign investors.
Chinese, Taiwanese and Hong Kong foreign buyers are followed by Mexicans (11%), Canadians (10%), Indians (7%), Colombians (3%), British (3%), Australians (3%), Germans (2%), Venezuelans (2%) and Israelis (2%).
Foreigners have their eyes on Florida
Nearly a quarter of all home purchases by foreign nationals were made in Florida. Twenty-three percent of these total investments between April 2022 and March 2023 occurred in the Sunshine State. Despite a slight decline of one point from the previous year, it leads the ranking for the fifteenth consecutive year, according to the report.
"Florida, Texas and Arizona continue to attract foreign buyers despite the hot weather conditions during the summer and the significant spike in home prices that began a few years ago," Yun said.
California and Texas ranked second and third, each accounting for 12% of total foreign investment.
