Foreign investments in U.S. housing nose-dives
Unsteady global economic growth leads to less foreign investments in U.S. homes.
A decline in the global economy has lead to a major falloff in foreign investments in U.S. residential real estate.
According to a survey of residential purchases from international buyers, released by the National Association of Realtors (NAR), foreign buyers purchased $77.9 billion worth of U.S. existing homes in a 12-month period from April 2018 to March 2019. This marks a 36% decline from purchases of $121 billion in the previous 12 months.
Global economic growth, which increased in 2016 to 2017, slowed to 3.6% in 2018 and is on pace to taper to 3.3% in 2019, the NAR said.
Non-resident foreign buyers accounted for $33.2 billion of U.S. existing-home sales during the 12-month span, dropping 37% from the prior level of $53 billion, the NAR reported.
Resident foreign buyers, or recent immigrants to the United States, purchased $44.7 billion of residential properties; a 34% drop from the prior level of $67.9 billion.
“A confluence of many factors – slower economic growth abroad, tighter capital controls in China, a stronger U.S. dollar and a low inventory of homes for sale – contributed to the pullback of foreign buyers,” said Lawrence Yun, NAR chief economist. “However, the magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.”
The full NAR’s full Profile of International Transactions in U.S. Residential Real Estate 2019 can be read here.
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