{"id":20954,"date":"2022-08-30T12:55:52","date_gmt":"2022-08-30T12:55:52","guid":{"rendered":"http:\/\/www.anthonydidonato.net\/wordpress\/?p=20954"},"modified":"2022-08-30T12:55:54","modified_gmt":"2022-08-30T12:55:54","slug":"inventory-issues-block-foreign-investors","status":"publish","type":"post","link":"https:\/\/www.anthonydidonato.net\/wordpress\/inventory-issues-block-foreign-investors\/","title":{"rendered":"Inventory Issues Block Foreign Investors"},"content":{"rendered":"\n

Inventory Issues Block Foreign Investors<\/p>\n\n\n\n

Worsening housing affordability and stubborn inventory shortages are not only pushing more Americans out of the real estate market but also blocking many foreign investors from purchasing homes in the U.S., according to the National Association of REALTORS\u00ae\u2019 newly released 2022 Profile of International Transactions in U.S. Residential Real Estate<\/a>.<\/p>\n\n\n\n

The annual number of home purchases in the U.S. by foreign buyers was the lowest on record in the 12 months from April 2021 to March 2022, the report shows. International buyers purchased 98,600 U.S. homes in that time, marking a 7.9% drop from the previous year and the lowest number since NAR began tracking such data in 2009. This is the second straight year of steep declines in foreign investment in the U.S. since the COVID-19 pandemic began. NAR Chief Economist Lawrence Yun notes that \u201crestrictions and general caution tied to international travel during the pandemic\u201d continue to hinder demand from abroad. However, he adds, affordability and inventory challenges were the top issues cited by international buyers who decided not to purchase a home in the U.S.<\/p>\n\n\n\n

Despite fewer sales, the overall dollar value of foreign home purchases in the U.S. has spiked because of record-high home prices. Foreign investors purchased $59 billion worth of U.S. real estate from April 2021 to March 2022, an 8.5% increase from the previous year, according to NAR\u2019s report. The average and median purchase prices for international buyers have increased 17.7% year over year and reached record highs\u2014$598,200 and $366,100, respectively. (In that same time period, the overall median price for an existing home jumped 10% to $374,300, NAR data shows.) Chinese buyers paid the highest average purchase price at just over $1 million, according to NAR\u2019s report. Nearly one-third of Chinese buyers purchased property in California.<\/p>\n\n\n\n

Foreign investors tend to be more insulated from volatility in the U.S. market<\/a> and likely will return in greater numbers in the future, even as the economy softens here at home, Yun says. \u201cDue to rising interest rates, overall home sales will decline in the U.S. this year,\u201d he notes. \u201cForeign buyers, however, are likely to step up purchases, as those making all-cash offers will be immune from changes in interest rates. In addition, international flights have increased in recent months with the lifting of pandemic-related travel restrictions.\u201d<\/p>\n\n\n\n

A Snapshot of Foreign Buyers<\/h4>\n\n\n\n

The most number of international buyers in the U.S. from April 2021 to March 2022 came from Canada and Mexico. But Chinese and Canadian buyers spent the most, according to NAR\u2019s report.<\/p>\n\n\n\n