Nearly half of all foreign sales were in three states: Florida, California, and Texas.
Between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153 billion of residential property. That surpasses a previous 2015 high of $103.9 billion.
In that time, 284,455 U.S. properties were purchased by foreign buyers, up 32 percent from 2016, NAR’s report notes.
“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” says Lawrence Yun, NAR’s chief economist. “While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work, and invest.”
China buyers continued to hold the highest sales dollar volume for the fourth straight year. However, Canadian buyers’ investments in U.S. properties saw a significant uptick. Transactions from Canadians totaled $19 billion, which is a new high for Canadian buyers in the U.S.
Yun says the increase in activity from Canadian buyers is mostly because they have been targeting property in some of the priciest markets in the U.S., yet those prices still remain more affordable than their native land. Some cities in Canada, including Vancouver and Toronto, have seen prices escalate even faster than U.S. prices in recent months.
“Inventory shortages continue to drive up U.S. home values, but prices in five countries, including Canada, experienced even quicker appreciation,” Yun says. “Some of the acceleration in foreign purchases over the past year appears to come from the combination of more affordable property choices in the U.S. and foreigners deciding to buy now knowing that any further weakening of their local currency against the dollar will make buying more expensive in the future.”
Foreign buyers, on average, paid $302,290 for a U.S. property—9 percent higher than 2016’s median sales price and higher than the sales price of all existing homes sold during that period ($235,792). About 10 percent of foreign buyers purchased a property for more than $1 million. Forty-four percent of transactions were all-cash purchases, down slightly from 50 percent in 2016, according to NAR’s report.
Yun says he believes the expanding U.S. and global economies will keep foreign demand high for American properties. The main challenges, however, will remain the shortage of homes for sale in the U.S. and economic and political headwinds that could curb sales activity to foreign buyers in the U.S.
“Stricter foreign government regulations and the current uncertainty on policy surrounding U.S. immigration and international trade policy could very well lead to a slowdown in foreign investment,” Yun says.