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Housing Market Snapshot: Why Is Foreign Investment Declining?

The National Association of Realtors (NAR) recently released results from a survey, which showed America experienced a 5% decrease in annual foreign investment in home sales. According to survey data, foreign buyers invested $74 billion in the direct purchase of existing homes during the year spanning April 2019 through March 2020. This represents a 5% fall from one year ago and also marks the second year in a row that there was a decline in foreign investment in United States residential real estate. 

NAR Chief Economist Lawrence Yun commented on the decline, citing possible factors attributing to it: "Foreign buyers and recent immigrants have become less of a force in the United States housing market over the last couple of years. A lack of housing inventorythe primary factor hindering domestic buyersis also holding back some foreign buyers. Additionally, less cross-border travel, falling international trade and fewer foreign students attending American universities are impacting foreign homebuyers."

Other statistics highlighted in NARs report included the fact that China and Canada ranked among the top two spenders in America's residential sales dollar volume, posting $11.5 billion and $9.5 billion, respectively. This duo has managed to maintain these top positions since 2013.  

Fast on China and Canadas heels were Mexico ($5.8 billion), India ($5.4 billion), and Colombia ($1.3 billion). Among these top five spenders, China was the only one that spent less than the year prior (down from $13.4 billion last year to $11.5 billion this year). The major "upset" within this group was Columbia, which ousted the United Kingdom from its previous fifth place roost. 

Yun also shared his predictions for what to expect in the coming days: "In the upcoming year, better opportunities may become available for foreign buyers in large cities like New York and San Francisco. New patterns of domestic migration are trending away from expensive cities to more affordable suburbs and small communities because of the pandemic and greater work-from-home possibilities." 

About Author: Andy Beth Miller

Andy Beth Miller is an experienced freelance editor and writer. Her main focus is travel writing, and when she is not typing away from her computer at her home in the Hawaiian Islands, she is regularly roaming the world as a digital nomad, and loving every minute of it. She has been published in myriad online and print magazines, is a fan of all things outdoors, and finds life (and all of its business, technological, and cultural facets) fascinating in their constant evolution. She is excited to spectate as the world changes, and have a job that allows her to bring a detailed account of those constant shifts to her readers at home and abroad.
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