As analysts, industry participants, and policymakers struggle to boost homeownership among Americans, foreign activity in the U.S. housing market remains strong.
According to a profile of international homebuying activity released by the National Association of Realtors (NAR), total international home sales were estimated at $92.2 billion from April 2013 through March 2013, up from the previous period's level of $68.2 billion.
"Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability, and an incredible opportunity for investment in their future," said NAR President Steve Brown.
Approximately 65 percent of purchases by foreign buyers over the year involved a single-family home, with 42 percent used as a primary residence. Because non-residents are limited to six-month stays in the country, most buyers use their properties for vacation or rental purposes or as an investment, NAR says.
While interest in U.S. housing spans the globe, NAR reports the greatest amount of activity came from buyers in Canada, China, Mexico, India, and the United Kingdom, which together accounted for nearly 54 percent of all reported international transactions last year. Canada held on to the largest share of purchases at 19 percent, while China took the lead in dollar volume, purchasing an estimated $22 billion.
Four states—Florida, California, Arizona, and Texas—comprised 55 percent of total reported purchases, with Florida staying on top at 23 percent. California followed at 14 percent, followed by Texas and Arizona at 12 percent and 6 percent, respectively.
According to the group, among foreign buyers, Europeans last year tended to flock toward the warmer climates of Florida and Arizona, while Asian buyers were drawn to the West Coast. Buyers from all countries showed greater preference toward areas where there were already concentrations of people of their own nationality.
NAR also found that nearly 60 percent of reported international sales were all-cash, nearly double that of domestic purchases. "Mortgage financing tends to be a major problem for international clients due to a lack of a U.S. based credit history, lack of a Social Security number, difficulties in documenting mortgage requirements and financial profiles that differ from those normally received by financial institutions from domestic residents," the association explained.