• Foreign buyers spent $59 billion on US real estate between April 2021 and March 2022, a new report details.
  • Investors from abroad are far more likely to pay in cash, making them immune to high mortgage rates.
  • States like Florida, Texas, and California are top destinations for international investment.

If the US housing market is about to crash again, as some real estate experts and economists have suggested, it appears that international buyers haven’t gotten the memo.

Foreign buyers spent $59 billion on US homes from April 2021 to March 2022, which was up 8.5% year-over-year, according to a July report from the National Association of Realtors (NAR).

NAR dollars up



National Association of Realtors


That increase came despite the fact that the number of homes purchased by foreigners fell 7.9% year-over-year, largely because pandemic restrictions hindered travel and kept would-be buyers from checking out properties in person, according to the report.

NAR sales down



National Association of Realtors


More money was spent on homes by international investors even though they bought fewer units because the average home price foreigners paid rose 18% year-over-year to just shy of $600,000, according to the NAR. That’s far higher than the 10% year-over-year rise and the average price of $374,300 for all US existing-home sales that the NAR documented.

There may be some signs of softness in the housing market — including a decline in mortgage applications and an uptick in price cuts — but homebuyers should be confident that a housing market crash isn’t coming, in large part because foreign buyers will help keep the market afloat in key markets, said Matt Christopherson, a senior research analyst at NAR, in a recent interview with Insider.

“I think that there’s some validity in that there will definitely be changes, and we’re already seeing changes,” Christopherson, a main author of the report, told Insider. “I just don’t see the exact same thing happening as in 2008. I think the fundamentals are a little bit different and people are in a better place.”

4 reasons why the foreign buying boom will continue

Foreign buyers will continue to funnel money into US homes for four main reasons, according to Christopherson: US homes are attractive compared to those in other markets, foreign buyers can avoid rising mortgage rates by paying in cash, travel restrictions have loosened, and there’s still pent-up demand for homes.

First, foreign buyers are choosing homes in US metro areas because they’re “comparatively inexpensive” when juxtaposed to cities in other nations, according to the NAR report. Also, the US real estate market also tends to be stable, and the same can be said for the dollar. Those are attractive draws for foreign buyers looking to beat inflation by turning cash into hard assets.

There’s plenty of evidence for Christopherson’s second point, as NAR data shows that 44% of foreign home buyers made an all-cash payment, which is nearly double the 24% rate for all existing-home buyers. Rapid interest rate hikes from the Federal Reserve this year have made borrowing more costly, but some foreign buyers have dodged that headwind by paying up front.

NAR cash 44%



National Association of Realtors


The end of pandemic-era travel restrictions will lead to an upswing in purchases by wealthy foreign buyers, in Christopherson’s view. International buyers tend to gravitate toward higher-end homes, according to NAR’s data, and it can be tough for prospective purchasers to bite the bullet and shell out a half-million dollars or more without touring houses in-person.

“Especially with the higher price tag, it’s likely that the buyers wanted to come view their investment before purchasing,” Christopherson said. “And many of them weren’t able to do that — or at least easily — and also, with uncertainty, with rising prices and everything, some might be waiting off.”

Christopherson continued: “But we believe that there’s a high possibility of foreign purchases continuing to increase now that they can more easily travel.”

There will also be pent-up demand from homebuyers, both foreign and domestic, who were able to visit US homes during the pandemic but were priced out of the market, Christopherson said. He believes this group of buyers will swoop in if the housing market continues to cool off.

“It’s not like we’re seeing slow home sales,” Christopherson said. “We’re just seeing them normalize from these blockbuster two years we just had. Specifically, last year was very much a record-breaking year. And as you can see, home prices are still up from last year. Our latest figure was, it’s up 13% from last year.”

The analyst continued: “If anything, it’s more that the growth is slowing — not that it’s declining.”

And even if foreign buyers don’t continue to push the US housing market like he expects, Christopherson said that there would still be a silver lining for domestic homebuyers.

“The overall number of foreign buyers decreased, which we kind of view as a positive thing for domestic buyers,” Christopherson said of last year’s market. “It was already such a competitive year, these past two — especially last year, but the past two years in the domestic market — that if there were more foreign buyers, it would’ve just made it even more difficult for domestic buyers to be able to access and afford homes.”

3 housing market trends to watch

Within NAR’s recent report, there are three noteworthy trends within the US housing market.

The first is that the nation’s three largest states saw a disproportionately large amount of attention from international buyers. Florida, California, and Texas claim about 27.5% of the US population but made up 43% of home sales to foreign buyers, according to the report. Interest in homes in those states isn’t unique to foreign buyers, Christopherson noted.

Another takeaway from the report that Christopherson said surprised him most is how active Chinese buyers were in the US housing market. While only 6% of foreign buyers were from China, which was third to Canada (11%) and Mexico (8%), the amount spent by Chinese buyers ($6.1 billion at an average price of over $1 million) dwarfed that of those from other nations. Despite making nearly twice as many purchases, Canadian buyers spent less at $5.5 billion at an average price of $485,000 while buyers from Mexico spent just $2.9 billion at an average price of $365,000.

The last takeaway that Christopherson noted was that foreign buyers had more variety in home purchases than their domestic peers. While American home buyers mostly target single-family homes, foreign buyers are more likely to invest in condominiums and properties that they could then rent out, Christopherson said, adding that these units are often in the suburbs instead of urban centers.

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