Foreign buyers of US homes surges to new record high

by Steve Randall19 Jul 2017
The value of US homes bought by foreigners surged 49% to $153 billion in the year to March 2017.

The new record high was driven by Canadian buyers and far surpasses the previous record of $103.9 billion from 2015, the National Association of Realtors says.

Foreign buyers snapped up 284,455 US homes, a 32% rise from 2016, while their share of all purchases by dollar volume increased to 10% from 7% in 2016.

"The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year," said Lawrence Yun, NAR chief economist. "While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest."

The top foreign buyers of US homes were Chinese ($31.7 billion), their fourth straight year in the lead; but it was Canadian buyers that came flooding back to the market after a dip in 2016.

From $8.9 billion of purchases in 2016, Canadians spent $19 billion in the year to March 2017, a new high. A surge in prices north of the border is one factor in this rebound in activity.

"Inventory shortages continue to drive up U.S. home values, but prices in five countries, including Canada, experienced even quicker appreciation," said Yun.

Apart from China and Canada, the UK, Mexico and India provided the largest dollar share of US home purchases.

Yun says the activity may slow due to tight inventory of US homes but also weaker currencies in Canada and the UK, and restrictions on capital outflow from China.

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