International activity in the U.S. real estate market plummeted as foreign homebuyers are competing with domestic purchasers for a limited supply of homes, according to the National Association of Realtors.
Tight housing inventory, which is also causing home prices to rise, drove total international home sales to $121 billion between April 2017 and March 2018, a decline of 21% from the previous 12-month period.
Foreign home buying activity is centered around three states — Florida, California and Texas — which continue to be the top destinations for international house purchasers, followed by Arizona and New York.
International homebuyers typically buy more expensive homes than the average existing home price, and are more likely than Americans to purchase a property with all cash. The median price for an existing home was $249,300, but the median price a foreign purchaser paid was $292,400.
Chinese homebuyers purchased the priciest homes, with a median price of $439,100. At 78%, Canadian purchasers were most likely buy a house with all cash.
The majority of international house shoppers, or 66%, purchased a detached, single-family property, about 14% bought a condominium and 13% purchased a townhouse. Only 3% of international homebuyers bought residential land with the intent to build a house, according to the NAR.
About 52% of international purchasers bought a home in the U.S. to serve as their primary residence.
Five countries made up almost half of all home sales from foreign buyers between April 2017 and March 2018: China, Canada, India, Mexico and the United Kingdom.