Foreign purchases of U.S. homes had their biggest drop ever, bringing relief to waves of American house hunters who have struggled to compete in affluent neighborhoods with wealthy buyers from abroad, The Wall Street Journal reported. Purchases by international buyers totaled $121 billion in the fiscal year ended in March, down from $153 billion the previous year, according to a survey released Thursday. That 21 percent decline was the largest on record. The drop in foreign interest helps well-heeled buyers in places like Manhattan, Seattle, San Francisco, Miami, and Orange County, Calif. While foreigners make up a small share of the overall U.S. housing market, they are concentrated near the high end of the market and are more likely to pay in cash and bid above the asking price, which has challenged local buyers to come up with larger down payments and pay more. The sharp decline in purchases reflected higher home prices, a strengthening dollar and intensifying political tensions between the U.S. and other parts of the world, economists say. The pullback creates an additional challenge for many sellers, who have welcomed foreign interest and the ease of all-cash deals. The housing market is already slowing, especially for developers of higher-end condos, some of whom heavily marketed their units to foreign investors.
