In a year marked by a significant slowdown in international home sales in the United States, Canadians have emerged as the top foreign buyers, despite the overall market decline. According to a recent report by the National Association of Realtors (NAR), Canadians purchased $6.6 billion worth of residential property in the US during the 12 months ending in March 2023. This figure represents a notable 12.7% of the total $53.3 billion in international home sales, making Canada the leading foreign buyer in a year when international transactions reached their lowest level since 2009.
The report highlights that the US real estate market experienced a sharp decline in international sales, dropping by 9.6% compared to the previous year. Various factors contributed to this downturn, including rising interest rates, economic uncertainty, and ongoing travel restrictions due to the COVID-19 pandemic. Despite these challenges, Canadians continued to invest in US real estate, driven by the strong Canadian dollar and the desire for vacation homes in warmer climates, particularly in states like Florida, Arizona, and California.
Interestingly, the NAR report also reveals that Canadian buyers preferred detached single-family homes, with 66% of their purchases falling into this category. The average purchase price of properties bought by Canadians was around $488,000, reflecting their focus on mid-to-upper market homes. Additionally, many Canadians paid in cash, a trend that has become more common due to the favorable exchange rate and the desire to avoid high-interest mortgages in the current economic climate.
While the overall decline in international home sales is concerning, the sustained interest from Canadian buyers highlights their significant role in the US housing market. As the global economy continues to recover and travel restrictions ease, it remains to be seen whether Canadian investment in US real estate will continue at its current pace or if other foreign buyers will begin to re-enter the market in greater numbers.
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