A recent study shows that 46 percent of people who speak Mandarin Chinese as their native language and bought homes in the 17 months prior to June 2015 paid up front with cash. In 2005, only 14 percent paid completely with cash, which is an increase of 229 percent over the last 10 years and the largest jump for any language group.
The study was conducted through a partnership by RealtyTrac and Ethnic Technologies, and information was sourced from a pool of 10 million public records for residential property sales.
When looking at all home sales during the same period, 33 percent paid cash compared to 20 percent in 2005, which is an increase of 65 percent.
Daren Blomquist, the vice president of RealtyTrac, said that cash buyers are assuming a more prominent role in the market now than they did 10 years ago, and Mandarin-speaking buyers are likely to be Chinese nationals. He explained that foreign nationals paying cash have helped accelerate appreciation of U.S. home prices in recent years because they do not have as many income restrictions as traditional buyers do.
Blomquist warns that the activity of foreign cash buyers is a double-edged sword. It will create a strong market in the short term because of worldwide economic instability. However, should the demand from foreign cash buyers diminish, the market will become susceptible to a crash.
In addition to making up a larger percentage of cash buyers, people speaking Mandarin Chinese now make up a greater percentage of all home buyers. From 2005 to 2010 home sales to this language group increased by 9 percent, and 50 percent of the U.S. housing market is now comprised of Asian, Hispanic and African-American buyers.