2022 International Transactions in US Residential Real Estate
In July, NAR Research released the 2022 International Transactions in US Residential Real Estate report, which presents information on REALTOR® transactions with international clients who have bought and sold residential properties in the United States. The report also provides information on US clients looking to purchase overseas property. I spoke with my colleague Matt Christopherson, Senior Research Analyst, about the report’s key findings and conclusions.
What is the profile of international transactions in residential real estate in the United States? What type of data can we find in this report?
Matt Christopherson: This report presents a profile of foreign buyers of residential real estate in the United States over the past year. In the report, we look at where people are buying, the states and regions they’re buying in, the types of properties they’re buying, and more. We also look at the experience estate agents have working with domestic clients looking to buy property overseas.
What are the main lessons of the report?
Matt Christopherson: There have been fewer foreign buyers over the past year, while their dollar buying volume has increased. This is due to the continued rise in prices in the United States and foreign buyers who are generally looking for more expensive homes compared to the typical domestic buyer. Buying just 98,600 homes (1.6% of existing home sales in the United States), foreign buyers achieved a purchase volume of $59 billion (2.6% of the dollar volume of home sales existing). The country with the highest percentage of US buyers was Canada, and the state with the most foreign buyers was Florida. Foreign buyers mainly bought single-detached homes, and almost half of them paid cash.
What are the main differences between last year’s report and the latest version?
Matt Christopherson: Some key differences and changes are that there were fewer foreign buyers than last year, but they bought a higher dollar volume, which was due to rising US home prices and the fact that foreign buyers generally search for and buy homes at a higher price. However, foreign buyers remain at just under 2% of total US home sales.
What significant trend(s) stood out to you in the 2022 report?
Matt Christopherson: One main trend that is significant in this area of real estate is the share of foreign buyers buying with all-cash offers. This has always been high, and last year they bought with all-cash offers at nearly double the rate of domestic shoppers: 44% bought all-cash compared to 24% of domestic shoppers. This makes foreign buyers relatively unaffected by the rising mortgage rates we have seen and makes their offers very competitive.
What aspects of this report do you find most interesting?
Matt Christopherson: I find it very interesting to see in which states and in which types of areas (suburbs vs. urban centers, etc.) buyers from different countries are buying. For example, buyers from Canada, Brazil and Colombia are more likely to buy from Florida, while buyers from China and India are more likely to buy from California. Additionally, among the top 6 countries, buyers from Brazil are most likely to buy from a central city/urban area, buyers from India are more likely to buy from a suburban area, and buyers from Colombia and Canada are more likely than others to buy in smaller cities.