Here’s why foreign buyers are really pulling back from the US housing market

The number of American homes purchased by international buyers has plummeted in the last year — and experts know why.

According to a new study from the National Association of Realtors, foreign purchases of US residential real estate have sunk to the lowest level ever recorded since 2009, when NAR started tracking it. Between April 2023 and March 2024, non-American homebuyers bought 36% fewer houses compared to the 12-month period prior, the most significant amount of sales to date.

The reason for the sudden backing away, the new NAR report says, is a combination of factors that are also impacting would-be domestic buyers, namely high home prices and low inventory. As well, international investors are currently facing a strong US dollar, which certainly does not help their situation.

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“The strong US dollar makes international travel cheaper for Americans but makes US homes much more expensive for foreigners,” NAR Chief Economist Lawrence Yun explained in the report, adding that “Therefore, it’s not surprising to see a pullback in US home sales from foreign buyers.”

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He continued to note that the market’s current characteristics have leant themselves to such a buyer recession in the past as well.

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“Historically, low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike,” said Yun.

As for those buyers who did buy a stateside abode in the past year, the amount they paid was record-breaking, averaging over $780,000 per property with a median of $475,000. Comparatively, the median price paid in 2023 was $396,400. Most significantly, these buyers hailed from Canada, China, Mexico and India — and bought homes in Florida, Texas, California and Arizona. Chinese buyers paid the highest price — $1.3 million — on average.

The report further noted that half of foreign buyers paid all-cash (compared to 28% of domestic existing home purchases) and 45% intend to use them as a vacation house, rental property or combination of the two.

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