It is no secret that the United States has long been a desirable destination for foreign home buyers. After all, it offers a stable political environment, world-class infrastructure, and access to some of the best educational institutions in the world.
Not surprisingly, then, international transactions in U.S. residential real estate have been on the rise in recent years.
The following report looks at international transactions in U.S. residential real estate. It includes highlights, as well as statistics on foreign buyers, properties purchased, the amount of money spent, location uses, etc.
Let’s dive in.
Highlights: Foreign Investment US Real Estate Statistics
From April 2020 to March 2021, investors from outside the United States bought 107,000 properties worth $54.4 billion in the United States.
Foreign-born individuals make up 14.25 percent of the population in the country’s 50 largest metros, on average. San Jose, Miami, and Los Angeles have the greatest foreign-born populations at 37.56 percent each.
Immigrants who have been in the country for less than a year and those who are on visas that allow them to reside in the United States bought $32.4 billion worth of existing residential properties.
Ex-pats who lived outside the country bought $22 billion worth of existing houses.
58% of foreign buyers who reside in the United States are recent immigrants (less than two years at the time of the transaction) or non-immigrant visa holders.
The number of international purchasers who made purchases in the United States hit a new high of 2.8 percent of $5.8 trillion in existing-home sales.
Due to the areas and sort of properties sought by foreign purchasers, the median existing-home sales price among international buyers was $351,800, 15% more than the $305,500 median price for all existing homes sold in the United States.
8% of foreign buyers purchase U.S. homes priced at $1M or more.
Chinese buyers had the highest median purchase price, at $476,500, and more than a third – 34 percent – bought a property in California.
In many American metros, house values are relatively low when compared to the global cities’ center areas. Even in a more expensive US city like San Francisco, per square meter of residential real estate costs $7,180 as opposed to $26,262 in London (UK), $28,570 in Hong Kong (China), $10,947 in Toronto(Canada), $10,932 in Mumbai (India), etc.
Where are International US Property Buyers From?
11. From April 2020 to March 2021, the most number of foreign purchasers for U.S. residential real estate came from Canada, Mexico, China, India, and the United Kingdom (29% of $54.4 billion worth of foreign buyer purchases).
12. China and Canada retained their first and second place rankings in US residential sales dollar volume at $4.5 billion and $4.2 billion, respectively. India ($3.1 billion), Mexico ($2.9 billion), and the United Kingdom ($2.7 billion) were the last three countries in the top five on this metric.
13. Canada emerged as the most popular country of origin for foreign purchasers from April 2020 to March 2021, accounting for 8% of foreign buyer purchases.
14. Mexico was in second place, with a 7% share of all foreign buyers. China fell to the third position, with a 6% market share, after having been the leading country of origin for foreign purchasers since 2015. India and the United Kingdom were tied for fourth place, each with a 4% market share.
15. Asia and Oceania buyers made up the majority of purchasers, with 22% from Asia and Oceania, 19% from Latin America and the Caribbean, 11 percent from Europe, 8 percent from North America (Canada), 4 percent each from Africa and other regions.
16. Chinese buyers purchased $4.5 billion of existing homes, making it the largest foreign buyer in terms of the dollar volume of homes purchased.
17. The dollar value of all existing-house sales in the United States to Candian foreign buyers reached $4.2 billion.
20. Foreign buyers from the United Kingdom bought $2.7 billion.
Foreign Real Estate Buyers Financing Statistics
21. The percentage of foreign buyer purchases that were all-cash sales was 39%.
22. The United Kingdom had the highest proportion of all-cash purchases, with over four out of five purchasers – 82 percent – making such purchases.
23. Two out of five Chinese buyers (40%), two out of three Mexican purchasers (66%), and two out of three Canadian purchasers (67%) made an all-cash buy.
24. Asian buyers were least likely to pay all-cash, with only 8% of them doing so.
Why are Foreigners Buying Property in the USA?
25. Forty-three percent of foreign buyers purchased the property for primary residence use and 65% purchased detached single-family homes and townhouses.
26. The most common reason for a property’s sale is to rent it out, accounting for 37% of transactions.
27. The average annual gross rental yield for 2021 was 7.7 percent.
28. Rental prices for multifamily housing in Las Vegas, Nevada rose by 23% between October 2020 and October 2021.
29. 42% of foreign purchasers bought the property for use as a vacation home, rental property, or both.
30. Vacation home sales made up 6% of existing house purchases from April 2020 through March 2021, compared with 5% in the previous year.
31. The most popular use for a Canadian home was as a vacation property, with 84 percent of buyers planning to do so. Around half of UK purchasers bought a house with the primary purpose of using it as holiday accommodation, rental, or both.
32. The majority of Asian Indian buyers, 79 percent, intended to use the property as a primary residence, followed by Mexican purchasers at 42%.
33. Chinese consumers were the most frequent purchasers of a home for student use, accounting for 13% of purchases.
Where are Foreigners Buying Homes in the USA? Statistics
34. Florida remained the most popular destination, with 21% of foreign buyers purchasing property there. Latin America was Florida’s main buyer (34%), Europe came in second (23%), and Canada was third (17%). It was the favorite state destination for both Canadian and United Kingdom purchasers.
35. The second most popular state for foreign buyers was California. Asia/Oceania accounted for 47% of California’s foreign purchasers. It was the favorite destination of Chinese and Asian Indian purchasers in particular.
36. Texas received 9% of foreign buyers. Latin America/Caribbean accounted for 42% of Texas purchases. Among Mexican purchasers, Texas was the top destination, and among Asian Indian purchasers, it was the second favorite destination.
37. The fourth highest state for foreign buyers was Arizona. North America is home to half of the foreign purchasers (Canada). One in four Canadian purchasers bought a property in Arizona, which is also one of Mexico’s top destinations.
38. New Jersey attracted 4% of all purchasers. Asian/Oceania made up half of New Jersey’s buyers. It is one of the most popular destinations for Chinese, Asian Indian, Mexican, and United Kingdom consumers.
39. 4% of foreign purchasers came from New York, with 51% of them being Asian/Oceania. Chinese buyers ranked it as their third favorite destination.
40. Other popular choices were North Carolina, Ohio, Georgia, and Michigan, each with a 3% market share. Foreign buyer purchases were reported in 45 states and the District of Columbia by respondents of the poll.
Type of Residential PropertyPurchased By International Buyers Statistics
41. 65% of foreign buyer purchases were detached single-family houses and townhouses.
42. Foreign purchasers who live outside of the United States are slightly more likely to purchase condominiums, with 19% opting for condos, compared to foreign purchasers living in the United States, which is 11%.
43. Buyers from Mexico and Asia Indian were the most likely to acquire single-family detached houses since the majority of purchasers wanted to use them as primary residences.
Types of Areas Where Foreigners Buy Property Statistics
44. When it comes to location, 49 percent of foreign buyers bought houses in a suburb.
45. Asian Indian buyers prefer to live in a suburb because the majority of Asian Indian purchasers purchase real estate as a second or primary house.
46. Chinese buyers had the most purchases in a city, whereas Canadian and UK buyers had the greatest proportion of purchasers who acquired a property in a resort location.
Property Prices for Foreign Home Buyers Statistics
47. Foreign purchasers paid a median price of $351,800 for existing homes in the United States from April 2020–March 2021, which was higher than the overall median price of $305,500 for all existing homes sold in the United States during that period.
48. During April 2020—March 2021, 9% of foreign purchasers bought houses for more than $1 million, compared to 6% among all existing-home purchasers.
49. When it comes to foreign purchasers who live in the United States, the median purchase price was $375,800, which is greater than the median purchase price for overseas buyers ($331,900).
50. The median purchase price was $538,900 among Asian Indian buyers.
51. The second-highest median purchase price was made by Chinese purchasers, who paid $476,500.
Conclusion:
As the demand for housing continues to increase in the United States, foreign investors are playing an increasingly important role in the U.S. residential real estate market. As the USA holds many reasons to invest in the property, the international foreign real estate buyers are going to continue increasing.
The easy buying process and mortgage approval also contribute to the increasing foreign buyer purchases.
If you are also interested in buying a home in the USA as a foreigner, here is a guide for you: How can foreigners buy property in the USA – A Complete Guide
Michele Lawrie is the Chief Real Estate Officer at HomeAbroad and has worked as a real estate professional for the past 14 years,helping domestic and foreign national clients navigate the home buying and selling process.
She is passionate about real estate and strives to educateread more...
Due to the areas and sort of properties sought by foreign purchasers, the median existing-home sales price among international buyers was $351,800, 15% more than the $305,500 median price for all existing homes sold in the United States. 8% of foreign buyers purchase U.S. homes priced at $1M or more.
For the 14th straight year, Florida remained the top destination for foreign buyers, accounting for 24% of all international purchases. California ranked second (11%), followed by Texas (8%), Arizona (7%), and New York and North Carolina, tied at 4%.
China, Canada, India, Mexico and Brazil were the top five countries of origin for foreign U.S. buyers. Chinese buyers had the highest average purchase price, at “just over $1 million,” per the report, with 31% of purchasers from China opting for properties in California.
Yes, a non-resident foreign investor can invest in US real estate. There are no restrictions on who can invest in US real estate. Any person, whether they are a resident or not can purchase property in the United States.
Current State. According to data reported by the PEW Trust and originally gathered by CoreLogic, as of 2022, investment companies own about one fourth of all single-family homes. Last year, investor purchases accounted for 22% of American homes sold.
In a study of USDA reports, Pew found the foreign country that owns the most U.S. land is not China or Russia, but rather, our neighbors north: Canada. Investors from the Great White North, according to the USDA, own about 12.8 million acres of U.S. land, most of it forest land.
Chinese investors are among the top foreign purchasers of residential real estate, along with Canadians, according to the National Association of Realtors. Other states have had concerns over foreign ownership of land and have made efforts to regulate it.
The state with the highest one-year ROI on residential single-family homes is Arizona with 27.42 percent, according to iPropertyManagement data. The next two highest states are Utah with 27.05 percent and Idaho with 27.02 percent.
“90% of all millionaires become so through owning real estate.” This famous quote from Andrew Carnegie, one of the wealthiest entrepreneurs of all time, is just as relevant today as it was more than a century ago. Some of the most successful entrepreneurs in the world have built their wealth through real estate.
Warren Edward Buffett (/ˈbʌfɪt/ BUF-it; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway.
The rights to purchase and own property in the United States is the same for a foreign investor as they are for a United States citizen. These tax benefits are the major factor luring more and more investments by foreign investors in the US real estate market.
A high ownership rate of 63 percent in France had elevated opinions of real estate as the safest investment. The city has a thriving property market, with demand driven by domestic and international buyers. Paris's investment property prices have remained relatively stable, with an average increase of 8.7%.
China is home to more of the world real estate market assets (by value) than any other country at $42.7tn or 21 per cent of global real estate value, just ahead of the US at $42.1tn.
Chinese buyers are returning to the U.S. housing market after a long lull, but recent efforts by several states to restrict certain foreign purchases could make homebuying harder for them. Why it matters: Chinese buyers spent $6.1 billion on existing U.S. homes last year, more than any other international homebuyers.
Chinese investors have been lining up to buy properties in Canada, the US, New Zealand, Thailand, and Australia, majorly because these five countries have been hot markets for them.
Upon sale of real property, the foreign investor will be subject to FIRPTA withholding tax at the rate of 15% of the total sale price (not on gain realized from sale) subject to certain exceptions. FIRPTA tax must be withheld from the purchase price by the buyer and is treated as an advance payment of U.S. taxes.
The research suggests that McDonald's owns about 70% of the buildings and 45% of the land at its locations worldwide. Once all the math is done, calculations show that McDonald's owns around 47,037 acres of land. McDonald's only owns and operates about 15% of locations directly. The remainder is run by franchisees.
If the company has borrowed money to purchase the house, it can build equity over time, essentially increasing the percentage of the home it owns outright and can then borrow against later on.
In 2022, the No. 1 action Americans took to build wealth, stated by 27% of respondents, was investing in the stock market. Just 12% invested in real estate.
The 2022 Land Report 100, compiled each year by The Land Report magazine, released its annual list of landowners who own the most acres in the United States. The nation's largest private landowners are the Emmerson family in California who own over 2.4 million acres.
How much money does the U.S. owe to China? China owns roughly $1.08 trillion worth of U.S. debt. 2 This amount is subject to market fluctuations. The value will change whenever China trades Treasury securities or when the prices of those bonds change.
Highlights: Foreign Investment US Real Estate Statistics
From April 2020 to March 2021, investors from outside the United States bought 107,000 properties worth $54.4 billion in the United States. Foreign-born individuals make up 14.25 percent of the population in the country's 50 largest metros, on average.
At the same time, the 98,600 homes purchased by foreign investors were 7.9% lower than the prior period — making up the fewest number of homes purchased since 2009. In total, foreign investment made up 2.6% of the $2.3 trillion in existing home sales in the period.
In play now in China, where around 70% of household wealth is in property, this phenomenon is weighing on the post-pandemic recovery of household consumption, which Chinese policymakers have vowed to make a more prominent driver of economic growth.
How have Chinese and Canadian investments developed over time? The share of Chinese investors in the U.S. real estate market remained somewhat constant until 2018 when it hovered at around 15 percent, before dropping to 11 percent in 2019 and then six percent in 2021.
According to the U.S. Department of Agriculture's (USDA) latest report on foreign ownership of American land, from 2021, 146 Chinese investors held 383,935 acres—nearly double the 193,700 acres that comprise New York City.
Chinese buyers comprise one of the largest groups of foreign buyers of residential property in the United States. Historically, between 20,000 and 40,000 residential properties were bought by Chinese nationals, but in 2022, both the sales volume and percentage of all foreign-bought properties declined.
Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. For instance, an investment with a profit of $100 and a cost of $100 would have an ROI of 1, or 100% when expressed as a percentage.
Each real estate office sets its own standards for top producers, but it's safe to say that a top producer would have to sell at least one home per month to qualify. Top producers earn around $112,610 a year to start, according to the BLS. 1 Mega-stars could earn $500,000 per year and up.
Because of the many tax benefits, real estate investors often end up paying less taxes overall even as they are bringing in more income. This is why many millionaires invest in real estate. Not only does it make you money, but it allows you to keep a lot more of the money you make.
The management consulting firm Capgemini separates the HNWI population into three wealth bands: Millionaires next door, who have $1 million to $5 million in investable wealth. Mid-tier millionaires with $5 million to $30 million to invest. Ultra-HNWIs, those with more than $30 million8.
Paramount Global (PARA) and Louisiana Pacific (LPX) were new positions in Berkshire's portfolio last year. Buffett first bought Paramount PARA +0.1% in the first quarter of 2022 and Louisiana Pacific in the third quarter of 2022. He's owned Apple since 2016.
If the Federal Reserve's holdings are excluded, foreigners own nearly 60 percent of outstanding marketable treasuries. Foreigners own less-significant portions of other asset markets. Their holdings of equities, though large in dollar terms, are small relative to the size of the equity market.
Yes, it is possible for a non-permanent resident to buy a house in the United States. Mortgage approval odds generally depend on the lender, type of mortgage, income status and whether the non-permanent resident can prove their intent for long-term residency.
After Hong Kong, New Zealand and Australia were the least affordable countries overall in the study which looked at the U.S., Canada, the UK, Hong Kong, Singapore, Australia, New Zealand and Ireland. This chart shows the places where it's hardest to afford a home (2023).
Investors probably need no explanation why and convincing that Florida tops the list of the best states for the long term rental investment strategy. Our nationwide rental market analysis shows that, on average, you can expect the highest rate of return in the Sunshine State.
Bankrate said Gainesville ranked No. 1 because homes in the area have appreciated 40% in one year, higher than any other location in the analysis. Jobs and population in the city grew 15%, Bankrate said, citing data from the U.S. Census and U.S. Labor Department.
Canadian investors lead this pack, by a long shot, with nearly 9.4 million acres of U.S. land — more acreage than 44 of the top 50 foreign landowners combined, according to the report. (These people own the most land in America.)
Investing expert Barbara Friedberg says a real estate allocation of 5% to 10% is a good rule of thumb since real estate is an alternative asset class. At the same time, private equity and real estate investor and serial entrepreneur Ian Ippolito recommends putting as much as 13 to 26% or more into real estate.
The foreign direct investment in the United States position increased $506.1 billion to $4.98 trillion at the end of 2021 from $4.47 trillion at the end of 2020. The increase mainly reflected a $378.4 billion increase in the position from Europe, primarily the Netherlands and the United Kingdom.
Share: Housing's combined contribution to GDP generally averages 15-18%, and occurs in two basic ways: Residential investment (averaging roughly 3-5% of GDP), which includes construction of new single-family and multifamily structures, residential remodeling, production of manufactured homes, and brokers' fees.
The 2022 Land Report 100, compiled each year by The Land Report magazine, released its annual list of landowners who own the most acres in the United States. The nation's largest private landowners are the Emmerson family in California who own over 2.4 million acres.
Like many rules of real estate investing, the 50 percent rule isn't always accurate, but it can be a helpful way to estimate expenses for rental property. To use it, an investor takes the property's gross rent and multiplies it by 50 percent, providing the estimated monthly operating expenses. That sounds easy, right?
Because of the many tax benefits, real estate investors often end up paying less taxes overall even as they are bringing in more income. This is why many millionaires invest in real estate. Not only does it make you money, but it allows you to keep a lot more of the money you make.
2% Rule. The 2% rule is the same as the 1% rule – it just uses a different number. The 2% rule states that the monthly rent for an investment property should be equal to or no less than 2% of the purchase price. Here's an example of the 2% rule for a home with the purchase price of $150,000: $150,000 x 0.02 = $3,000.
Do Foreigners Pay Taxes on U.S. Investments? Foreigners who are not resident or nonresident aliens of the U.S. do not pay any taxes on their investments to the U.S. government. They will most likely have to pay taxes on their investment earnings in their home country.
Top Home Ownership Statistics In America: 65.8% of Americans own a home as of 2022. Some 74 million Americans, or about 27%, live in a condo or HOA property. 58.4 percent of the housing units were owner-occupied.
Real estate makes up two-thirds of global real assets or net worth. The value of residential real estate including land amounted to 46 percent of global net worth in 2020, with corporate and government buildings and the land associated with them accounting for an additional 23 percent.
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