Thread: Foreign Buyers and Immigration Expected to Drive Future Demand for U.S. Housing

Foreign Buyers and Immigration Expected to Drive Future Demand for U.S. Housing

MAY 20, 2017

U.S. real estate markets are increasingly becoming international, and changing demographics brought forth by immigration and growing interest from foreign buyers are positioned to bolster home sales activity and prices. That’s according to speakers at an international real estate forum organized by the REALTOR® University Richard J. Rosenthal Center for Real Estate Studies session here at the 2017 REALTORS® Legislative Meetings & Trade Expo.

NAR’s Danielle Hale, managing director of housing research, was joined by Alex Nowrasteh, immigration policy analyst at the Center for Global Liberty and Prosperity at the Cato Institute, to share insight on the current and future impact of foreign buyers and immigration on the U.S. housing market.


According to Nowrasteh, the rising U.S. population is being bolstered by a growing number of immigrant households, and their presence will continue to transform the housing market. Referring to data from the 2015 American Community Survey, Nowrasteh said of the roughly 321.4 million residents in the U.S., 278.1 million are born here (natives) and the remaining 43.3 million – made up of 20.7 million naturalized citizens and 22.6 million non-citizens – are foreign-born.

“Immigration affects rents and home prices far more than it affects the labor market,” said Nowrasteh. “An expected 1 percent increase in a city’s population produces a 1 percent uptick in rents, while an unexpected increase results in a 3.75 percent rise.”

Nowrasteh, pointing to studies conducted on immigration and housing, explained that the effects of immigration on real estate are localized, with most of the impact felt where immigrants tend to reside: low-to-middle income counties.

Each immigrant adds 11.6 cents to housing value within that county. In 2012, 40 million immigrants added roughly $3.7 trillion to U.S. housing wealth.

Referencing the Legal Arizona Workers Act that went into effect on January 1, 2008, Nowrasteh said the decline in population resulting from the law likely exasperated the drop in home prices the state experienced during the downturn. Fewer households purchasing or renting property subsequently lead to higher vacancies and lower prices. “Immigration is the best way to increase population, housing supply and prices,” he said.

Presenting some of the key findings from NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate released last July, Hale said foreigners increasingly view the U.S. as a great place to buy and invest in real estate. She noted the upward trend in sales activity from resident and non-resident foreign buyers in the past seven years, with total foreign buyer transactions increasing from $65.9 billion in 2010 to $102.6 billion in the latest survey.

“A majority of foreign buyers in recent years are coming from China, which surpassed Canada as the top country by dollar volume of sales in 2013 and total sales 2015,” said Hale.

“Foreign buyers on average purchase more expensive homes than U.S. residents and are more likely to pay in cash.”

Perhaps foreshadowing where a bulk of future home purchases from immigrants will come from, Hale said that in NAR’s latest survey roughly over half of all foreign buyers purchased property in Florida (22 percent), California (15 percent), Texas (10 percent), Arizona or New York (each at 4 percent).

Latin Americans, Europeans and Canadians – who tend to buy for vacation purposes in warm climates – mostly sought properties in Florida and Arizona. Asian buyers were most attracted to California and New York, while Texas mostly saw sales activity from Latin American, Caribbean and Asian buyers.

NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate survey is scheduled for release this summer.

Looking at the past year, Hale said monthly data from the Realtors® Confidence Index revealed a rise in responses from Realtors® indicating they worked with an international buyer.

“Chinese buyers are once again expected to top all countries in both total dollar volume and overall sales,” said Hale.

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.

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Don't count your money yet. That was before our dear President Trump was elected President. It's all a changing now. Your future in rents and housing sales are hence forth going to depend on how many Americans got a job and how many Americans got a raise. So adjust your "bizzes" accordingly to the new America First Script.

We don't need them to buy houses. We have enough Americans who will buy houses. Go back to your third-world country. Thank you.

Yes, that is exactly right. We don't need your labor, we don't need your mortgage loan, we don't need your education expense, your health care expense, your crime expense, none of it. We don't need any of it. Americans will do the labor, collect the wages and rent a place or buy a home, our system is already set up to pay for the education K-12 of our citizens, we're working on the health care plans but even this problem is nothing that 20 to 30 million new jobs for Americans won't solve, and we've plenty of our own crime and don't need to import any more.

So, NO MORE!!

The illegals are building them, I guess they feel like they are entitled to live in them too. I would like to see details on how they are paying for them.

As foreigners move in, Miami real estate is so expensive that locals are moving out

So, if immigration is restricted there will be more affordable housing for those with lower incomes.

If you own a home or condo and want to sell it in the future you want prices to go up so you get more for yours.

If you want to buy a home or condo in the future you want prices to go down so you get a good deal and save money.

If you build buildings and sell condos, like Trump and the Kushner's, you want prices to keep going up so you make more profit.

"They buy apartments from me," Trump said during the Alabama rally. "They spend $40 million, $50 million. Am I supposed to dislike them? I like them very much.”

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