Yuval Golan, CEO of Waltz, said this week “Then we need to wire money across two countries, that takes time. There’s additional foreign currency exchange that we need to deal with, a bunch of titles are things we don’t know, like a title company, and a mortgage broker and a lender that might not understand our history of credit and income.” International buyers of U.S. residential real estate are facing significant challenges similar to those of domestic buyers. High home prices and limited supply are major hurdles, worsened by the strong U.S. dollar, which increases costs for foreign purchasers. These factors have led to a notable decline in international investment in the U.S. housing market. According to a National Association of Realtors (NAR) report, foreign buyers purchased 54,300 existing homes from April to March, a 36% drop from the previous year and the lowest since 2009 when tracking began. The dollar value of these transactions also fell by 21%, totaling $42 billion.
Average and median purchase prices for foreign buyers hit record highs, averaging $780,300 and $475,000, respectively. Despite the high prices, the strongest demand came from Canada, China, Mexico, and India, focusing on Florida, Texas, California, and Arizona properties. Chinese buyers, in particular, invested in higher-priced homes. The report only covers existing homes, not new developments where foreign buyers are also active. Lawrence Yun, NAR’s chief economist, noted that the strong U.S. dollar makes American homes more expensive for foreigners, reducing their purchasing power. Foreign buyers also face challenges navigating financial systems and cross-border transactions.
Yuval Golan highlights these hurdles. Foreign buyers often lack U.S. credit scores and must manage complex processes like currency exchanges and legal entities. Waltz simplifies this by underwriting buyers abroad, establishing LLCs, opening U.S. bank accounts, and handling currency exchanges. Despite innovations, foreign buyers account for only 1.3% of U.S. home sales, half of which are cash deals. Housing supply remains low, prices are high, and political uncertainty surrounding the upcoming U.S. election may deter further foreign investment unless economic and political conditions improve significantly.
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