On Monday, November 8, the United States lifted its travel ban for international travelers. With restrictions lifted, not only will we start seeing more tourists, but international investors will likely make their way back into the housing market as well. In 2020, the market saw $74 billion in home sales to foreign buyers, down from the $77.9 billion from 2019, but more than this year’s $54.4 billion according to the National Association of Realtors, the lowest throughout the 11-year period that is tracked in their report titled, International Transactions in U.S. Residential Real Estate.
Citizens from 33 countries, including China, India, and the United Kingdom – some of the biggest foreign buyers for the U.S. – will be allowed entry under specific requirements and realtors in big cities like New York, Los Angeles, and Miami, already have a long list of scheduled showings among foreign buyers looking to invest in domestic real estate, and according to CNBC, they’re only expecting more to come.
With prices continuing to rise, inventory remaining tight, and the 30-year fixed mortgage rates continuing to hover just above 3 percent (as of November 4, 2021 the 30-year fixed mortgage rate is 3.09 percent according to Freddie Mac). Considering all of these factors, renewed interest from wealthy foreign investors willing to buy up high-priced properties could spell another hurdle for homebuyers to jump over who are still looking for a home of their own.
To make matters more complicated, there is still a heavy lack in new residential homes being built. According to the U.S. Census Bureau, September saw 1.55 million housing starts, which was well below expectations. The reason for the decrease? Realtor.com suggests continued difficulties surrounding delivery timelines and other operational hurdles.
So, what do you think? Will this new influx of foreign investors spell trouble for buyers still looking to enter the housing market, or do you think their effect will be minimal?
Regardless, it’s important to track market trends, both past and present, to predict what patterns may be emerging in the near future and to prepare your team. To do that, you’ll want access to the latest market intelligence, and you’ll want it from a company you can trust to be accurate. With data powered by The Warren Group offering solutions for real estate professionals as well as solutions for mortgage professionals, that’s exactly what you’ll get. Gain insight into recent sales transactions with our property data and track trends emerging in your market with the Mortgage MartketShare and Loan Originator Modules.
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