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The number of U.S. homes purchased by international buyers has fallen to its lowest level in 15 years as foreign investors grapple with high prices, low inventory and a strong U.S. dollar – which has made properties even more expensive for them, according to a recent report from the National Association of Realtors.
From April 2023 through March 2024, international buyers purchased 54,300 residential properties nationwide, down 36% – or the equivalent of 30,300 fewer buyers – compared with the previous year. Along with the decrease in the number of homes bought, overall dollars for foreign-buyer purchases dropped to $42 billion, a 21.2% decrease from the prior period, the report shows.
Despite the overall decline, foreign buyers still in the market are spending record-breaking numbers on the purchase price of their U.S. homes. On average, foreign buyers paid $780,300 on their home purchase last year, a significant 21.9% year-over-year increase. The median price they paid jumped to $475,000, which is higher than the national median sales price of $392,600 recorded during the same period. Of the foreign buyers who bought homes during this period, 18% purchased properties worth more than $1 million.
These prices paid by foreign buyers are the highest ever recorded since the National Association of Realtors began tracking data on international buyers in 2009, according to the report.
The price difference between the national median and what foreign buyers paid, according to the report, reflects the choice of location and types of properties they purchased.
Nearly half of foreign buyers (45%) purchased property for use as a vacation home, rental property, or both. Canadian buyers (49%) were the most likely to purchase a home for vacation use in a resort area. Indian buyers (66%) were the most likely to purchase a home as their primary residence in suburban areas. Colombian buyers (68%) were the most likely to purchase a home for rental use, while Mexican (5%) and Chinese (3%) buyers were more likely to purchase a home for student use.
All-cash offers on the rise
Of the international buyers who purchased homes in the U.S., half made all-cash purchases, compared to 28% among all buyers, according to the report.
“Due to tight competition among the limited homes on the market, differing currency exchange rates, difficulty in obtaining mortgage financing and other reasons, foreign buyers tend to make all-cash purchases,” the report states.
All-cash offers accounted for 68% of home purchases made by non-resident foreign buyers compared to 36% among foreign buyers who live in the U.S.
More than two-thirds of Canadian (69%) and Chinese (68%) buyers made an all-cash purchase, compared to just under half of Mexican (44%) and Colombian buyers (42%). Indian buyers had the lowest share of cash sales, at 27%, as most (89%) reside in the U.S. and can obtain mortgage financing, according to the data.
Canada outpaces China
Canada ranked as the top country of origin among foreign buyers, accounting for 13% of all homes purchased among international buyers. China and Mexico followed at 11% each, India accounted for 10% of all purchases, and Colombia had the fifth-largest share at 4%.
China remains the largest foreign buyer in terms of the amount of money spent on home purchases. Chinese buyers spent $7.5 billion on the purchase of homes in the U.S., down significantly from $13.6 billion compared to the previous year. On average, Chinese buyers spent $1.3 million per home as they purchased in expensive states: 25% of Chinese buyers purchased a property in California, and 10% purchased in New York.
Canada spent the second most on home purchases ($5.9 billion), followed by India ($4.1 billion), Mexico ($2.8 billion) and Colombia ($7 billion).
Florida, Texas markets beat out California
For the 16th consecutive year, Florida remained the top destination for foreign buyers, accounting for 20% of all international purchases. Texas (13%) and California (11%) were second and third, respectively, followed by Arizona (5%), Georgia, New Jersey, New York and North Carolina (4% each).
The majority – 55% – of California’s foreign buyers came from Asia/Oceania, followed by Latin America (20%). It was the top destination among Chinese buyers and the second top destination among Mexican buyers.
-Embarcadero Media Real Estate Editor Linda Taaffe contributed to this article.
Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.
