After strong interest for several years, international buyers appear to be souring on the U.S. housing market.
The dollar volume of U.S. home sales to international buyers between April 2017 and March 2018 dropped 21 percent compared with the year-ago period, according to the National Association of Realtors.
Of the $121 billion in sales to international buyers, those currently living in the U.S purchased $67.9 billion in properties, while nonresident foreigners purchased $53 billion, both marking a drop from the previous year. Foreign buyers accounted for 8 percent of the $1.6 trillion in existing home sales, a drop from 10 percent the previous year.
While high home prices and inventory shortages are clearly playing some role in the drop. Competition from domestic buyers, whose demand is increasing sharply, may also be a deterrent. And the current political climate in the U.S. also should not be overlooked.
"The decline is partly coming off high levels of the prior year, but also surely from the strong rhetoric coming out of Washington against foreigners," said Lawrence Yun, chief economist for the Realtors. "There has been a large drop-off in foreign students attending U.S. universities already. Chinese [buyers], in particular, purchase homes for their kids while attending college."