Our recent post about more people buying homes with cash got us wondering about international buyers in the U.S. housing market. Here are a couple surprising facts about who else is buying homes in the U.S. and how they are paying for them:
1. International sales only account for a small share of total U.S. homes sales.
International clients bought $68.2 billion worth of properties in the U.S. in the 12 months ending March 2013, according to a report from the National Association of Realtors, that's only 6.3 percent of the total U.S. homes sales in the same period. In other words, American homebuyers are mostly competing with other American homebuyers.
2. China is NOT the number one country when it comes to foreigners buying U.S. homes.
Chinese buyers have definitely made the most headlines, and they are certainly one of the fastest growing sources of international buyers, but the top country buying homes in the U.S. is actually Canada. It's been that way since 2008. Canada accounts for 23 percent of total international transactions, while China only contributes 12 percent.
3. Canadians are hot for Arizona.
The top four states that attract the most international buyers are Florida, California, Arizona and Texas. Among all the foreign buyers purchasing in Arizona, 66 percent are Canadians. "That's because we don't get the polar vortex," says Jim Sexton, president of the Arizona Association of Realtors. "We also have different climates here. If they want snow, we can give them snow. If they want to stay in the pool, they can stay in the pool."
4. The number of foreign buyers paying with cash has more than doubled since 2007.
According to Walter Molony, from the National Association of Realtors, the main reason more and more international buyers are paying with cash is that it's getting harder and harder for them to obtain mortgages. Molony says getting financing can be difficult because many foreign buyers don't have a Social Security number or a U.S. based credit history.