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International buyers of US homes have fallen to the lowest since 2009, the National Association of Realtors says

Aug 2, 2023, 17:07 IST
Business Insider
The gap between single-family home constructions and the number of households formed grew to 6.5 million homes in 2022, according to Realtor.com.Joe Raedle/Getty Images
  • The US housing market has remained tight in 2023 – despite the Fed's steep interest-rate increases.
  • Fewer foreign buyers are entering the market than ever, according to a report by the National Association of Realtors.
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The US housing market has remained remarkably resilient this year, weathering the storm of the Fed's aggressive policy-tightening that has seen interest rates surge more than 500 basis points since early 2022.

High interest rates filter down to mortgage rates and tend to discourage new buyers. Despite that, the market has held firm in part because high rates also discourage sellers from giving up their low-rate mortgages locked in years ago.

A supply shortage has had significant knock-on effects for foreign buyers of American homes. Buyers from abroad have declined to the lowest level since records began in 2009, according to a report published by the National Association of Realtors.

Per the data, the number of existing homes purchased by foreign buyers from April 2022 to March 2023 fell by 14% to around 84,600.

And it's not just a housing shortage that has deterred foreign homeowners from owning American property.

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As of the survey's conclusion in March, it was 8.6% more expensive to buy an American home with Chinese yuan or British pounds, and 7% more expensive to buy with Canadian dollars.

The big dollar rally of 2022 has weakened the purchasing power of international buyers, so much so that 42% used all-cash financing as a way to circumvent the enormous mortgage rates.

By demographic, Asian buyers comprised 38% of the total new owners, with Latin Americans the second largest group at 31%.

All across America, a shortage of supply has propped up home prices over the past year, despite high rates weighing on demand. Median prices are nearing a record-high, clocking in at $426,056 in June, just 1.5% below the record median home price of $432,397 in May 2022, Insider reported two weeks ago.

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