Foreign investment in U.S. housing market plummets

Foreign investment in the U.S. housing market has hit its lowest point in over a decade, according to a new report from the National Association of Realtors (NAR).

The annual study, released in July, reveals that international buyers purchased $42 billion worth of U.S. existing homes from April 2023 through March 2024, a significant 21.2% decrease from the previous year. The number of existing homes sold to foreign buyers plummeted to 54,300, marking a 36% drop and the lowest figure since NAR began tracking this data in 2009.

NAR Chief Economist Lawrence Yun attributes this decline to economic factors, stating, "The strong U.S. dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners. Therefore, it's not surprising to see a pullback in U.S. home sales from foreign buyers."

The report comes amid a broader slowdown in the U.S. housing market. Overall existing home sales in 2023 totaled 4.09 million, an 18.7% decrease from 2022 and the lowest level since 1995.

Despite the decline in volume, the average and median purchase prices for foreign buyers reached record highs. The average price stood at $780,300, while the median hit $475,000, increases of 21.9% and 19.8%, respectively, from the previous year.

Canada, China, Mexico, and India emerged as the top countries of origin for international buyers. China led in total dollar volume at $7.5 billion, continuing a trend that began in 2013.

Florida maintained its position as the most popular destination for foreign buyers for the 16th consecutive year, accounting for 20% of all international purchases. Texas (13%) and California (11%) followed as the second and third most favored locations.

The report also highlighted that half of all international buyer transactions were all-cash sales, compared to just 28% for all existing home buyers.

Yun noted ongoing challenges in the housing market, saying, "Historically low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike."

Alex Escudero, NAR's director of global strategy, emphasized the organization's commitment to fostering international investment, stating, "Fostering economic investment in culturally dynamic communities, businesses, and industries is a top priority for NAR. Our work provides members and their communities with tools, resources, and data to identify and highlight international investment opportunities in U.S. real estate."

As the U.S. housing market continues to navigate these challenges, the impact of declining foreign investment adds another layer of complexity to an already tumultuous landscape.