Blame Canada: Surge in foreign buyers pushing home prices up

Foreign buyers were behind $153 billion in U.S. home sales in the year that ended in March, jumping nearly 50 percent from the year prior. Their enthusiasm for property here is pushing home prices up.

Canadian buyers — fleeing climbing prices in Vancouver and Toronto — are partially responsible for the surge, logging $19 billion worth of deals this year, the Wall Street Journal reported, citing a new report from the National Association of Realtors. Last year, transactions involving Canadians only totaled $9 billion. Despite the strength of the U.S. dollar and restrictions on money leaving China, Chinese buyers were still the largest purchasers of U.S. homes by dollar volume last year, with $31.7 billion worth of purchases.

“It was surprising that it increased and the fact that it increased quite substantially is even more surprising,”Lawrence Yu, chief economist at NARE, told the newspaper.

Foreign buyers made up 10 percent of U.S. home sales this year by dollar volume, up from 8 percent last year. The latest S&P CoreLogic Case-Shiller Index shows that home prices in major U.S. cities climbed 5.5 percent in the 12-month period ending in April. [WSJ] — Kathryn Brenzel