The the volume of foreign buyers buying U.S. residential real estate rose dramatically during the latest 12-month survey from the National Association of Realtors. The 2017 Profile of International Activity in U.S. Residential Real Estate shoes that the dollar volume of purchases by foreign buyers rose from $102.6 billion in 2016 to $153 billion in the latest 12-month period ending in March. In all, foreign buyers purchased 284,455 U.S. residential properties accounting for 5 percent of existing home sales and 10% of existing home sales by dollar volume.

Foreign Buyers

If you were wondering what’s been driving the strength of U.S. housing markets through the first half of the year, the latest data from NAR goes a long way towards explaining the detachment of U.S. home prices from economic fundamentals like local wage growth. When central banks in virtually all developed economies have turned the global housing stock into a speculative asset, money looks for places to hide.

Chinese investment into U.S. homes continues its torrid pace as wealthy Chinese buyers race to get their money out of the Chinese mainland. So far at least, regulations to stem liquidity outflows seem to be having minimal effect. For the third consecutive year, China still leads all other nations in terms of purchases of U.S. homes in terms of actual units and dollar volumes. The average price of $781,801 for a Chinese buyer still leads all other countries in 2017.

Foreign Buyer Statistics

Part of the increase in foreign investment is coming from our neighbors to the north as Canadians are looking for alternatives to their massively overvalued housing market. U.S. home prices probably look like a bargain if you are coming from markets like Vancouver or Toronto. This would explain why the dollar volume of purchases from Canada more than doubled from the previous 12-month period. It is worth noting, however, that even with that dramatic increase in dollar volume, Canada is still second to China in terms of purchases of U.S. homes.

So where are all of these buyers going? The latest data indicate that just 5 states account for almost half of the activity of foreign buyers of U.S. real estate, with Florida, California, Texas, New Jersey and Arizona as the top destinations of foreign buyers. It is interesting that while the share of homes purchased by foreigners in California has cooled slightly during the last few years, purchases in Texas are at a multi-year high.

State Share of Homes To Foreign Buyers

If you are looking for a nice, affordable home to buy here in Houston Texas keep these statistics in mind when you hear a story about a local developer wanting to build luxury townhomes. While your local politicians might welcome the investment of this global liquidity, it certainly doesn’t help local residents in their quest to find an affordable home.