Will Decline in Foreign Homebuying Bring Relief to Domestic Buyers?

International buyers scooped up homes regularly in coastal markets such as California and Florida, but the pandemic may put a serious pause on the already dwindling demand from foreign homebuying, according to Realtor.com. The majority of foreign buyers, 60%, are recent immigrants or foreigners living in the U.S. The other percentage are overseas buyers purchasing investment properties or vacation homes. Compared to overall buyers, international homebuyers are a small percentage, but they drive up prices in markets like New York, Miami, and Los Angeles. Those selling homes in certain markets may be affected by the absence of foreign buyers, but local buyers can find relief.

Foreign appetite fell sharply in 2018 and 2019, according to NAR. Much of the buying came from China. It slowed in 2019 after the Chinese government implemented new controls over foreign currency purchases and as the country’s trade dispute with the U.S. heated up. A stronger dollar, which makes U.S. homes more expensive in foreign currencies, and concerns about global economic growth slowed overseas buying more broadly.

This year, demand looks likely to be even weaker, real-estate agents say.

Limited travel between the U.S. and other countries, worries about virus transmission and new restrictions on immigration could weigh on international investment in U.S. housing this year.

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