The real estate market in the United States, specifically in residential areas is slowly growing, thanks to interest of foreign investors. A recent study by major bank lenders has shown that international buyers are buying homes in urban and suburban areas helped by low exchange rates and affordable homes. HSBC (NYSE: HSBC) has stated that nearly 30 percent of its home mortgages this year have been given to foreign buyers to buy homes in the US. The bank confirmed that this has been a growing trend for the past few years with buyers from Asia, Europe and Australia showing an interest in buying property in the United States.
Contribution by Chinese buyers
Between 2013 and 2014 international home buyers have contributed to 35 percent of the total sales among which Chinese buyers have been the most active. According to a recent report released by the National Association of Realtors, out of the $ 92 billion spent by international buyers in real estate nearly $22 billion has been spent by Chinese buyers. Out of the $1.2 trillion spent on the real estate market in the United States during this period, international buyers have contributed 7 percent to the overall amount. This growing interest of foreign buyers in seeking local property has piqued the interest of private lenders and banks.
Mortgages by Private Buyers
California based Mega Capital Funding; a private lending firm has started providing mortgage loans to non-resident buyers, specifically from China, who are interested in buying residential property in the US. FBC Mortgage located in Florida is another American lender actively involved in helping international buyers identify ideal and buy properties. This year nearly 65 percent of their business has been contributed by them. Besides seaside locations like California and Florida, foreign investors are also purchasing property in Manhattan, Miami, Connecticut and other locations.
This demand by international buyers is helping slow, but steady growth of real estate market in United States, which was plagued by high mortgage costs and lack of affordable credit. HSBC with its roots in Asia has been able to get buyers to purchase residential properties in the US for its clients as their children are studying in colleges and schools across New York, San Francisco, South California and Irvine.
Getting a mortgage through traditional banks is a problem for international buyers as they lack standard information like credit history, social security number, financial profile and so on, which can help them get loans within the US. These buyers are lucrative for sellers as they make all cash payment when compared to domestic buyers