International buyers are reducing their activity in the U.S. housing market due to high mortgage rates, soaring home prices, limited inventory, and the strength of the dollar, which diminishes their financial incentives.
Between April of last year and March of this year, international buyers purchased approximately 84,600 homes. This represents the lowest number recorded since the National Association of Realtors began tracking such data in 2009, and a 14% decrease from the previous year.
Despite buying fewer homes, international buyers paid higher prices, with a median purchase price of $396,400, the highest ever recorded by the Realtors.
The top five countries of origin for international buyers of existing homes by number of houses were China, Mexico, Canada, India, and Colombia. This survey does not include new construction, where international buyers are also active.
Chinese buyers had the highest average purchase price of $1.23 million, likely influenced by their preference for buying in California, where home prices are highest. Additionally, 15% of foreign buyers purchased homes valued over a million dollars.
“Home purchases from Chinese buyers increased after China relaxed its strict pandemic lockdown policy, while buyers from India benefited from the country’s strong GDP growth,” said Lawrence Yun, NAR’s chief economist.
While overall foreign sales declined, Chinese purchases experienced significant growth. According to Juwai IQI, an Asia-based international real estate technology group, the total number of Chinese home purchases in 2023 was the highest since 2018, which was one of the peak years for Chinese international property purchasing.
“In 2023, the typical Chinese buyer is no longer an offshore investor but is on their way towards becoming an American resident and citizen,” said Kashif Ansari, Juwai IQI co-founder and group CEO.
The most popular destinations for foreign buyers remain consistent, including Florida, California, Texas, North Carolina, Arizona, and Illinois. Chinese buyers, in particular, favor California due to the proximity to local schools and universities for their children.
About 42% of foreign buyers made cash purchases. Half of the buyers purchased properties for use as vacation homes, rental properties, or both, an increase from the previous year.
The decrease in foreign purchases is unlikely to alleviate competition for domestic buyers, as international buyers only account for slightly over 2% of all buyers. However, it may have a marginal impact on local markets favored by foreign buyers.
Domestic buyers are currently more concerned with mortgage rates, which have more than doubled since the first two years of the pandemic, and the limited supply of homes for sale.
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