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Economists' Outlook

Housing stats and analysis from NAR's research experts.

Half of Foreign Buyers Paid in Cash in April 2015—March 2016

July 12, 2016
Financing & Credit, Mortgages & Home Financing, Working With International Clients
By: Scholastica (Gay) Cororaton

Fifty percent of reported foreign buyers of U.S. residential property transactions were all-cash sales, according to NAR’s recently released 2016 Profile of International Activity in U.S. Residential Real Estate.

financing

 

Non-resident foreign buyers tend to purchase in cash while resident foreign buyers obtain mortgage financing from U.S. sources because they are likely to have a U.S. based credit history and able to provide the mortgage documentation required by U.S. creditors.[1] Seventy-three percent of non-resident foreign buyers made an all-cash purchase compared to 33 percent of resident foreign buyers.

financing by type
Foreign buyers from Canada, China, and the United Kingdom were more likely to pay cash. Meanwhile, foreign buyers from India and Mexico, most of whom are resident foreigners buying primary residences, were more likely to obtain mortgage financing from U.S. sources.
financing major
Transferring funds from the home country to the United States can be difficult and/or lengthy. Among cases in which a respondent had a foreign client who did not purchase property, 21 percent were associated with cases where the client “cannot move money” and “could not obtain financing”.

[1] Non-resident foreigners are 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 are 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.

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