Foreign U.S. Home Sales Dollar Volume Surges 49 Percent to Record $153 Billion

Washington, D.C. July 18, 2017 (nar.realtor) Fueled by a substantial increase in sales dollar volume from Canadian buyers, foreign investment in U.S. residential real estate skyrocketed to a new high, as transactions grew in each of the top five countries where buyers originated.

This is according to an annual survey of residential purchases from international buyers released today by the National Association of Realtors ®, which also revealed that nearly half of all foreign sales were in three states: Florida, California and Texas.

NAR logo

NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate, https://www.nar.realtor/topics/profile-of-international-home-buying-activity, found that between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153.0 billion of residential property, which is a 49 percent jump from 2016 ($102.6 billion) and surpasses 2015 ($103.9 billion) as the new survey high(1). Overall, 284,455 U.S. properties were bought by foreign buyers (up 32 percent from 2016), and purchases accounted for 10 percent of the dollar volume of existing-home sales (8 percent in 2016).

“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” said Lawrence Yun, NAR chief economist. “While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest.”

Although China maintained its top position in sales dollar volume for the fourth straight year, the significant rise in foreign investment in the survey came from a massive hike in activity from Canadian buyers. After dipping in the 2016 survey to $8.9 billion in sales ($11.2 billion in 2015), transactions from Canadians this year totaled $19.0 billion – a new high for Canada.

Yun attributes this notable rise in activity to Canadians opting to buy property in U.S. markets that are expensive but still more affordable than in their native land. While much of the U.S. continues to see fast price growth, home price gains in many cities in Canada have been steeper, especially in Vancouver and Toronto.

“Inventory shortages continue to drive up U.S. home values, but prices in five countries, including Canada, experienced even quicker appreciation(2),” said Yun. “Some of the acceleration in foreign purchases over the past year appears to come from the combination of more affordable property choices in the U.S. and foreigners deciding to buy now knowing that any further weakening of their local currency against the dollar will make buying more expensive in the future.”

Foreign buyers typically paid $302,290, which was a 9.0 percent increase from the median sales price in the 2016 survey ($277,380) and above the sales price of all existing homes sold during the same period ($235,792). Approximately 10 percent of foreign buyers paid over $1 million, and 44 percent of transactions were all-cash purchases (50 percent in 2016).

Foreign sales rise in top five countries; three states account for nearly half of all purchases

Buyers from China exceeded all countries by dollar volume of sales at $31.7 billion, which was up from last year’s survey ($27.3 billion) and topped 2015 ($28.6 billion) as the new survey high. Chinese buyers also purchased the most housing units for the third consecutive year (40,572; up from 29,195 in 2016).

Rounding out the top five, the sales dollar volume from buyers in Canada ($19.0 billion), the United Kingdom ($9.5 billion), Mexico ($9.3 billion) and India ($7.8 billion) all increased from their levels one year ago.

This year’s survey once again revealed that foreign buying activity is mostly confined to three states, as Florida (22 percent), California (12 percent) and Texas (12 percent) maintained their position as the top destinations for foreigners, followed by New Jersey and Arizona (each at 4 percent). Florida was the most popular state for Canadian buyers, Chinese buyers mostly chose California, and Texas was the preferred state for Mexican buyers.

Sales to resident foreigners and non-residents each reach new peak

The upswing in foreign investment came from both recent immigrants and non-resident foreign buyers(3) as each increased substantially to new highs. Sales to foreigners residing in the U.S. reached $78.1 billion (up 32 percent from 2016) and non-resident foreign sales spiked to $74.9 billion (up 72 percent from 2016).

“Although non-resident foreign purchases climbed over the past year, it appears much of the activity occurred during the second half of 2016,” said Yun. “Realtors® in some markets are reporting that the effect of tighter regulations on capital outflows in China and weaker currencies in Canada and the U.K. have somewhat cooled non-resident foreign buyer interest in early 2017.”

Looking ahead, Yun believes the gradually expanding U.S. and global economies should keep foreign buyer demand at a robust level. However, it remains to be seen if both the shortage of homes for sale and economic and political headwinds end up curbing sales activity to foreigners.

“Stricter foreign government regulations and the current uncertainty on policy surrounding U.S. immigration and international trade policy could very well lead to a slowdown in foreign investment,” said Yun.

NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate, conducted April 10 through May 1, surveyed a sample of Realtors ® to measure the share of U.S. residential real estate sales to international clients, and to provide a profile of the origin, destination, and buying preferences of international clients, as well as the challenges and opportunities faced by Realtors® in serving foreign clients. The survey presents information about transactions with international clients during the 12-month period between April 2016 and March 2017. A total of 5,998 Realtors® responded to the 2017 survey.

The 2017 Profile of International Activity in U.S. Residential Real Estate can be ordered by calling 800-874-6500, or online at www.nar.realtor/prodser.nsf/Research. The report is free to NAR members and accredited media and costs $149.95 for non-members.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1. NAR’s international survey began in 2009.

2. Canada, the United Kingdom, China, Germany and Mexico all had higher appreciation in real terms than the U.S.

3. The term international or foreign client refers to two types of clients: non-resident foreigners (Type A) and resident foreigners (Type B).

Non-resident foreigners: Non-U.S. citizens with permanent residences outside the United States. These clients typically purchase property as an investment, for vacations, or other visits of less than six months to the United States.

Resident foreigners: Non-U.S. citizens who are recent immigrants (in the country less than two years at the time of the transaction) or temporary visa holders residing for more than six months in the United States for professional, educational, or other reasons.

Media Contact:

Adam DeSanctis
(202) 383-1178
Email

84 Percent of Americans See Homeownership as Good Investment, Affordability a Growing Concern

Washington, D.C. – July 12, 2017 (nar.realtor) According to the National Association of Realtors®’ 2017 National Housing Pulse Survey, concerns over housing affordability show clear demographic divides especially among unmarried and non-white Americans. More than five out of 10 unmarried and non-white Americans view the lack of available affordable housing as a big problem, compared to only 40 percent of married and white Americans.

NAR logo

The survey, measures consumers’ attitudes and concerns about housing issues in the nation’s 25 largest metropolitan statistical areas and found that 84 percent of Americans now believe that purchasing a home is a good financial decision – the highest number since 2007. Yet six in 10 said that they are concerned about affordability and the rising cost of buying a home or renting in their area. Housing affordability was ranked fourth in the top-five issues Americans face in their area behind the lack of affordable health care; low wages and debt making it hard to save; and heroin and opioid drug abuse, and ahead of job layoffs and employment.

Nationally, 44 percent of respondents categorized the lack of available affordable housing as a very big or fairly big problem. In the top 25 densest markets, more than half see the lack of affordable housing as a big problem, an increase of 11 percentage points from the 2015 National Housing Pulse Survey. Low-income Americans, renters and young women most acutely feel the housing pinch. There is also greater concern about affordable housing among the working class (65 percent) than for public servants such as teachers, firefighters or police (55 percent).

“Despite the growing concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own. Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top reasons to own a home,” says NAR president William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties.

Eight out of 10 believe that the most important financial reason to own a home is that the money spent on housing goes towards building equity rather than to a property owner. Paying off a mortgage and owning a home by the time you retire is the next most important financial reason for buying a home followed by ownership being a good investment opportunity to build long-term wealth and increase net worth.

When asked about the amount of down payment needed for a mortgage, four in 10 respondents believe that a down payment of 15 percent or more is necessary. Seventy percent feel that a reasonable down payment should be 10 percent or less, according to the survey. Misperceptions about higher down payment requirements were most prevalent in bigger cities and by older adults.

Apparent confusion about down payment requirements most likely added to non-owners concerns about affordability. NAR’s Profile of Home Buyers and Sellers found that the median down payment for first-time buyers has been 6 percent for three straight years and 14 percent for repeat buyers in three of the past four years.

Over 50 percent of respondents strongly agree that homeownership helps build safe and secure neighborhoods and provides a stable and safe environment for children and family members.

The survey also found that four in 10 Americans say paying their rent or mortgage is a strain on their budget. Those most likely to say their mortgage is a strain have incomes under $60,000, are residents of New York City or the Pacific coast, are under the age of 50 and non-white. Just over half, 51 percent, of respondents said they were willing to strain their budget for a better living environment and would pick a neighborhood with better schools and job opportunities even if housing prices are a bigger strain on their budget. Those most willing to strain their budget are disproportionately married, upper income and living in the suburbs. Overspending on homes is more prevalent in Northeastern cities (36 percent), the Mountain West (34 percent) and the Pacific coast (33 percent).

The 2017 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program, which aims to position, educate and help Realtors® promote housing opportunities in their community, in both the rental and homeownership sectors of the market. The telephone survey polled 1,500 adults nationwide and has a margin of error of plus or minus 2.5 percentage points.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Media Contact:

Cole Henry
(202) 383-1290
Email

Home Staging Decreases Time on the Market, Finds Realtors® Report

Washington, D.C. – July 6, 2017 (nar.realtor) Sixty-two percent of sellers’ agents say that staging a home decreases the amount of time a home spends on the market, according to the National Association of Realtors® 2017 Profile of Home Staging.

NAR logo

“Realtors® know how important it is for buyers to be able to picture themselves living in a home and, according to NAR’s most recent report, staging a home makes that process much easier for potential buyers,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “While all real estate is local, and many factors play into what a home is worth and how much buyers are will to pay for it, staging can be the extra step sellers take to help sell their home more quickly and for a higher dollar value.”

According to the report, which is in its second iteration, nearly two-thirds of sellers’ agents said that staging a home decreases the amount of time the home spends on the market, with 39 percent saying that it greatly decreases the time and 23 percent saying it slightly decreases the time. Sixteen percent of sellers’ agents believe that staging either greatly or slightly increases a home’s time on the market, while 8 percent believe that it has no impact.

Seventy-seven percent of buyers’ agents said that staging a home makes it easier for buyers to visualize the property as their future home, and 40 percent are more willing to walk through a staged home they first saw online. However, 38 percent of buyers’ agents said that staging positively affects a home’s value if the home is decorated to the buyer’s taste, meaning that a home’s staging should be designed to appeal to the largest number of potential buyers.

Forty-nine percent of buyers’ agents said that staging has an effect on most buyers. Another 48 percent stated that staging has an effect on some buyers’ opinion of a home, but not always, and only 4 percent said that it has no impact on buyers.

Realtors® representing both buyers and sellers agreed that the living room is the most important room in a home to stage, followed by the master bedroom, the kitchen, and then the yard or outdoor space. The guest bedroom is considered the least important room to stage.

Real Estate Staging Infographic

The highest share of buyers’ agents, 31 percent, reported that staging a home increases its dollar value by 1 to 5 percent. Thirteen percent said that staging increases the dollar value 6 to 10 percent, while 25 percent stated it has no impact on dollar value. Only 1 percent of buyers’ agents felt that staging has a negative impact on a home’s dollar value.

Sellers’ agents report even more value is added from staging: 29 percent reported an increase of one to five percent in dollar value offered by buyers, 21 percent reporting an increase of 8 to 10 percent, and 5 percent reported an increase of 11 to 15 percent. No sellers’ agents reported a negative impact.

When deciding which homes to stage, 38 percent of sellers’ agents said that they stage all of their sellers’ homes before listing them, 14 percent will stage only homes that are difficult to sell, and 7 percent stage only homes in higher price brackets. Thirty-seven percent of sellers’ agents said they do not stage homes before listing them, but they recommend sellers declutter their homes and fix any faults with the property.

When it comes to paying for home staging, 25 percent of the time the seller pays before listing the home. Twenty-one percent of sellers’ agents will personally provide funds to stage the home, while 14 percent of agents will offer home staging services to sellers.

Beyond staging, agents also named the most common home improvement projects they recommend to sellers: Ninety-three percent recommend decluttering the home, 89 percent recommend an entire home cleaning, and 81 percent recommend carpet cleaning. Other pre-sale projects include depersonalizing the home, removing pets during showings and making minor repairs.

In March 2017, NAR invited a random sample of 53,760 active Realtor® members to fill out an online survey. A total of 1,894 useable responses were received for an overall response rate of 3.5 percent. At the 95 percent confidence level the margin of error is plus-or-minus 2.25 percent.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Media Contact:

Jane Dollinger
(202) 383-1042
Email

71 Percent of Homeowners Believe It’s a Good Time to Sell; Economic and Financial Confidence Dips: Realtors® HOME Survey

Washington, D.C. – June 26, 2017 (nar.realtor) Existing housing inventory has declined year over year each month for two straight years, but new consumer findings from the National Association of Realtors® offer hope that the growing number of homeowners who think now is a good time to sell will eventually lead to more listings.

NAR logo

That’s according to NAR’s quarterly Housing Opportunities and Market Experience (HOME) survey(1), which also found that fewer renters think it’s a good time to buy a home, and respondents are less confident about the economy and their financial situation than earlier this year despite continuous job gains.

One trend gaining steam in the HOME survey is an increased share of homeowners who believe now is a good time to sell their home. This quarter, 71 percent of homeowners think now is a good time to sell, which is up from last quarter (69 percent) and considerably more than a year ago (61 percent). Respondents in the Midwest (76 percent) surpassed the West (72 percent) for the first time this quarter to be the most likely to think now is a good time to sell.

Lawrence Yun, NAR chief economist, says it’s apparent there’s a mismatch between homeowners’ confidence in selling and actually following through and listing their home for sale. “There are just not enough homeowners deciding to sell because they’re either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy,” he said. “As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth.”

Added Yun, “Perhaps this notable uptick in seller confidence will translate to more added inventory later this year. Low housing turnover is one of the roots of the ongoing supply and affordability problems plaguing many markets.”

On the decline: renter morale about buying a home and financial and economic optimism

Confidence among renters that now is a good time to buy a home continues to retreat. Fifty-two percent of renters think now is a good time to buy, which is down both from last quarter (56 percent) and a year ago (62 percent). Conversely, 80 percent of homeowners (unchanged from last quarter and a year ago) think now is a good time to make a home purchase. Younger households, and those living in urban areas and in the costlier West region are the least optimistic.

The surge in economic optimism seen in the first quarter of the year appears to be short lived. The share of households believing the economy is improving fell to 54 percent in the second quarter after soaring to a survey high of 62 percent last quarter. Homeowners, and those living in the Midwest and in rural and suburban areas are the most optimistic about the economy. Only 42 percent of urban respondents believe the economy is improving, which is a drastic decrease from the 58 percent a year ago.

Dimming confidence about the economy’s direction is also leading households to not have as strong feelings about their financial situation. The HOME survey’s monthly Personal Financial Outlook Index(2) showing respondents’ confidence that their financial situation will be better in six months fell to 57.2 in June after jumping in March to its highest reading in the survey. A year ago, the index was 57.7.

“It should come as little surprise that the confidence reading among renters has fallen every month since January (64.8) and currently sits at its lowest level (53.8) since tracking began in March 2015 (65.7),” said Yun. “Paying more in rent each year and seeing home prices outpace their incomes is discouraging, and it’s unfortunately pushing home ownership further away — especially for those living in expensive metro areas on the East and West Coast.”

Under half of respondents believe homes are affordable for most buyers; one in five would consider moving

In this quarter’s survey, respondents were also asked about the affordability of homes in their communities. Overall, only 42 percent of respondents believe they are affordable for almost all buyers, with those living in the Midwest being the most likely to believe homes are affordable (55 percent) — and not surprisingly — West respondents (29 percent) being least likely to think homes are affordable.

Additionally, 20 percent of respondents would consider moving to another more affordable community. Those earning under $50,000 annually (27 percent) and those age 34 and under (29 percent) were the most likely to indicate they would consider moving.

“Areas with strong job markets but high home prices risk a migration of middle-class households to other parts of the country if rising housing costs in those areas are not contained through a significant ramp-up in new home construction,” said Yun.

About NAR’s HOME survey
In April through early June, a sample of U.S. households was surveyed via random-digit dial, including a mix of cell phones and land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,711 household responses are represented.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1. NAR’s Housing Opportunities and Market Experience (HOME) survey tracks topical real estate trends, including current renters and homeowners’ views and aspirations regarding homeownership, whether or not it’s a good time to buy or sell a home, and expectations and experiences in the mortgage market. New questions are added to the survey each quarter to reflect timely topics impacting real estate.

HOME survey data is collected on a monthly basis and will be reported each quarter. New questions will be added to the survey each quarter to reflect timely topics impacting the real estate marketplace. The next release is scheduled for Monday, June 12, 2017 at 10:00 a.m. ET.

2. Index ranges between 0 and 100: 0 = all respondents believe their personal financial situation will be worse in 6 months; 50 = all respondents believe their personal financial situation will be about the same in 6 months; 100 = all respondents believe their personal situation will be better in 6 months.

Media Contact:

Adam DeSanctis
(202) 383-1178
Email