Last month, The Wall Street Journal reported that foreign buyers were contributing to the rise in home prices in many high-demand markets around the U.S. Now, a study by the National Association of Realtors (NAR) shows that foreign buyers are purchasing much higher-priced homes than that of domestic buyers.
Median purchase prices of foreign and domestic buyers
Between April 2016 and March 2017, the median price of a property purchased by foreign buyers was $302,290, about 30 percent higher than the median purchase price of $235,792 for domestic buyers. Average price points are even more skewed, with the average purchase price of $536,900 among foreign buyers almost twice as high as the average purchase price of $277,700 among domestic buyers.
Part of the reason that the foreign buyers’ purchases tend to be more expensive is that this demographic often looks to buy homes in urban and inner-suburban areas where prices are higher. Non-resident foreign buyers are also likely to make their purchases in cash, with all-cash buys representing 72 percent of purchases by non-resident foreign buyers compared to 35 percent of purchases by resident foreign buyers.