Biden’s policies are destroying the real estate market all across the United States.
International buyers of U.S. residential real estate are encountering the same challenges as domestic buyers, including high prices and limited supply. Additionally, the strong U.S. dollar is making properties even pricier for them, leading to a significant decline in international purchases.
International buyers are retreating from the U.S. housing market due to high prices and a strong dollar, with purchases dropping 36% to the lowest level since 2009. Top buyers are from Canada, China, Mexico, and India.
Read more on CNBC. Link in bio. #RealEstate pic.twitter.com/eqCVcP3po2
— Milat Market Report (@MMarketReport) July 18, 2024
From April last year to March this year, international buyers purchased 54,300 existing homes, marking a 36% decrease from the previous year, according to the National Association of Realtors (NAR). This figure represents the lowest level of international investment since the NAR began tracking it in 2009. The dollar volume of these purchases was also down by 21%, totaling $42 billion.
The average purchase price for international buyers was $780,300, while the median price was $475,000—both record highs. The majority of these buyers came from Canada, China, Mexico, and India, with most properties being bought in Florida, Texas, California, and Arizona. Chinese buyers, in particular, spent the most money, targeting higher-priced homes.
It’s important to note that the NAR report only includes sales of existing homes, excluding new developments where foreign buyers are also active.
Lawrence Yun, chief economist for the NAR, explained that the strong U.S. dollar, while making international travel cheaper for Americans, makes U.S. homes significantly more expensive for foreigners. This financial strain is a major reason for the pullback in purchases from international buyers.
Here’s why international buyers are pulling way back from the U.S. housing market: Foreign buyers are facing high prices and tight supply in the housing market, and they’re also up against a strong U.S. dollar. https://t.co/CTEuFUr1Lt pic.twitter.com/hleU1CxQN9
— Sharyn C. Ahmad – Ready For Real Estate (@SharynCAhmad) July 17, 2024
In addition to the financial challenges, foreign buyers face other obstacles. Yuval Golan, CEO of Waltz—a company designed to facilitate foreign purchases of U.S. real estate—outlined some of these difficulties. He mentioned issues like the lack of a U.S. credit score, unfamiliarity with the process, and complications with currency exchange and cross-border money transfers.
To address these challenges, Waltz offers a streamlined, remote purchasing experience for foreign investors. The company underwrites buyers in their home country, assists in setting up an LLC, opens a U.S. FDIC-insured bank account, and facilitates currency exchanges quickly. Waltz also acts as a mortgage lender, albeit with rates higher than the market average.
Despite these efforts, international buyers currently account for just 1.3% of all U.S. home sales annually, with half of these sales being all-cash transactions, compared to 28% of total existing-home sales.
Although there is some increase in housing supply, it remains historically low, and prices are still high. Furthermore, the approaching presidential election adds another layer of uncertainty, which typically causes international buyers to hesitate.
Foreign buyers are fleeing the U.S. housing market, with sales at a record low https://t.co/4BRxl6cuaJ
— MarketWatch (@MarketWatch) July 18, 2024
Unless there are significant improvements in both economic and political conditions, it is unlikely that sales from foreign buyers will see a substantial increase in the coming year.
Major Points:
- International buyers are struggling with high prices, limited supply, and a strong U.S. dollar.
- Purchases dropped 36% to 54,300 homes, the lowest since 2009, with a dollar volume decrease of 21%.
- Average and median purchase prices for foreign buyers hit record highs.
- Buyers mainly from Canada, China, Mexico, and India, focusing on Florida, Texas, California, and Arizona.
- Waltz aims to simplify the process for foreign buyers, offering streamlined services and acting as a mortgage lender.
James Kravitz – Reprinted with permission of Whatfinger News
