Foreign buyers 20% more for US homes

The biggest deals in the residential market are coming from international buyers, many of them from Canada, according to National Association of Realtors’ data obtained by The Wall Street Journal.

Canadians made up 13 percent of international buyers, bumping down Chinese buyers from the top in the preceding 12-month period, according to NAR data examining buying patterns in the past 12-month period as of March.

The data also shows that international buyers are paying upwards of 20 percent more for median homes than the prior period, compared to domestic buyers only spending 2 percent more. International home buyers are paying an average price of $475,000, an average of $80,000 more than their US counterparts, compared to the prior period.

Buyers from India are fewer, but spend even more on average. They comprised 10 percent of foreign buyers, spending about $700 million more than the prior year, and generally buying higher-priced homes. Their median purchase was $675,000 with Florida and Texas their preferred locations.

International buyers have always been a small percentage of the market, making up less than 2 percent. It has dwindled slightly from 1.8 to 1.3 percent over the past year, a decrease attributed to low inventory and increased interest rates, according to the WSJ.

Foreign purchases also tend to be concentrated in Florida, California, Texas and Arizona. The Real Deal reported more than 13,000 deals in Palm Beach, Florida, with buyers in other U.S. states and 1,224 sales to buyers with addresses in foreign countries, totaling over $11 billion and nearly $1 billion in volume, respectively. Foreign and out-of-state buyers accounted for about 19 percent of sales in Palm Beach County in that period.

International buyers are generally less affected by rising interest rates since half of them paid cash, up from 42% last year. They are more affected by low inventory.

—Christina Previte