As home prices rise steeply nationwide, many in the United States see this as a stumbling block to attaining the American dream. But foreign investors see something else entirely: bargains.
As low inventory fuels increasing U.S. home prices, other countries are experiencing even faster home appreciation— thus, American properties have become enticing to foreigners.
“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,” chief economist at the National Association of Realtors (NAR) Lawrence Yun recently told Rismedia.
Foreign home buying in the U.S. hit a record high last year, growing 49%, to $153 billion, according to an NAR report titled Profile of International Activity in U.S. Residential Real Estate. The report noted that buyers from China made the largest investments ($31.7 billion), followed by buyers from Canada ($19 billion); UK ($9.5 billion); Mexico ($9.3 billion), and India ($7.8 billion).
Foreign buyers purchased 284,455 homes in the U.S. in 2016. The median sales price was $302,290. Nearly half of these investors—44%—paid with cash; 10% made purchases of $1 million and higher.
Interestingly, foreigners were attracted to different coasts. Canadians largely purchased Florida properties, while investors from China focused on California.