Foreign purchases of U.S. homes rose sharply over the past year, increasing more than one-third over the previous annual period, according to figures released today over by the National Association of Realtors (NAR).
International buyers purchased an estimated $92.2 billion in U.S. residential properties during the 12 months from April 2013 to March 2014, according to the NAR, up from $68.2 billion during the same period a year earlier. Purchases were split about equally between resident and non-resident foreigners.
"We live in an international marketplace; so while all real estate is local, that does not mean that all property buyers are," said NAR President Steve Brown. "Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability, and an incredible opportunity for investment in their future."
Small share of overall market
Despite the increase, foreign buyers accounted for only about 7 percent of U.S. existing home purchases. About two-thirds of the homes bought by international buyers were single-family homes.
Chinese buyers accounted for the largest dollar volume of foreign purchases, buying an estimated $22 billion in residential properties and accounting for 16 percent of all purchases, an increase of 4 percentage points over the previous year. Canadian buyers purchased the most properties, however, accounting for 19 percent of the total, down from 23 percent the previous year.
Along with Mexico, India and the United Kingdom, those nations accounted for 54 percent of all foreign U.S. home purchases. Four states - Florida, California, Arizona and Texas - made up over half of all foreign purchases, with Florida by itself accounting for nearly a quarter of the total.
Most pay cash
All-cash purchases made up nearly 60 percent of foreign transactions, a far higher figure than for domestic buyers. With non-resident foreigners limited to six-month stays in the United States, the majority of purchases were believed to be intended to be used as investment rentals or vacation properties, though two out of five were believed to be for use as primary residences.