International Buyers of U.S. Homes Face Tough Challenges

A Strong U.S. Dollar and High Prices Deter Foreign Investors

The National Association of Realtors (NAR) has released a new report showing that international buyers of U.S. residential real estate are facing significant challenges in 2023. The report reveals a 36% drop in the number of existing homes purchased by foreign buyers from April of last year to March of this year. This is the lowest level of international investment since 2009.

Why Are Foreign Buyers Pulling Back?

There are several reasons why international buyers are pulling out of the U.S. housing market. The strong U.S. dollar makes the homes even more expensive for foreign buyers, while high prices and tight supply are the same hurdles faced by domestic buyers.

In addition to these challenges, foreign buyers also face additional hurdles, such as:

• Credit Score Issues: Many international buyers do not have a credit score, which can make it difficult for them to secure a mortgage or financing.
• Language Barriers: Foreign buyers may not understand the language and customs of the U.S., which can make the buying process complicated.
• Currency Exchange Issues: Foreign buyers need to convert their currency to U.S. dollars, which can be a time-consuming and costly process.

Who Are the Top Buyers and Where Are They Buying?

The top buyers by volume in 2023 were from Canada, China, Mexico, and India. These buyers purchased the most properties in Florida, Texas, California, and Arizona. Chinese buyers spent the most money, purchasing higher-priced homes.

Is There a Solution for Foreign Buyers?

A new company called Waltz is aiming to simplify the process of foreign buyers purchasing U.S. homes. Waltz provides foreign investors with a remote experience to buy U.S. real estate in 30 days. The company underwrites foreign buyers in their home country, opens a U.S. FDIC-insured bank account, and collects their money locally.

What Does the Future Hold for International Buyers?

The current market conditions are unlikely to improve in the coming year unless several factors, both economic and political, improve. International buyers make up just 1.3% of all U.S. home sales annually, and half of international buyer sales were all-cash, compared with 28% of total existing-home sales.

Conclusion

International buyers of U.S. residential real estate are facing significant challenges in 2023. The strong U.S. dollar and high prices are making it difficult for foreign investors to purchase homes in the U.S. Despite these challenges, there are companies like Waltz that are working to simplify the process for foreign buyers.

FAQs

Q: Why are international buyers pulling out of the U.S. housing market?
A: International buyers are pulling out due to a combination of factors, including the strong U.S. dollar, high prices, and tight supply.

Q: What are the top buyers by volume in 2023?
A: The top buyers by volume in 2023 were from Canada, China, Mexico, and India.

Q: How many properties did international buyers purchase in 2023?
A: International buyers purchased 54,300 existing homes in 2023, a 36% drop from the year before.

Q: What is the purpose of Waltz?
A: Waltz is a company that aims to simplify the process of foreign buyers purchasing U.S. homes. The company provides foreign investors with a remote experience to buy U.S. real estate in 30 days.

Q: What does the future hold for international buyers?
A: The current market conditions are unlikely to improve in the coming year unless several factors, both economic and political, improve.

Author: www.cnbc.com

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