A new report shows major drops in international purchases of U.S. real estate, at a time when legal efforts to restrict buyers from certain countries ramped up.
According to new figures from the National Association of Realtors, the number of homes bought by foreign buyers has dropped to its lowest point since 2009, when NAR started tracking these transactions.
This news comes against a backdrop of state efforts to limit non-U.S. purchases, though experts say that’s not the only reason for the drop.
Steep declines: According to NAR, international buyers purchased $42 billion worth of U.S. homes between April 2023 and March 2024, a 21.2% drop compared to the prior year.
Over that same time period, buyers from outside the U.S. purchased 54,300 homes, which NAR said was a decline of 36% from the previous year and a record low.
Why is this happening? In addition to limits put forth by some states, foreign buyers experienced many of the same hardship that U.S. buyers had during the period — specifically issues relating to low inventory and high housing costs and elevated borrowing rates.
“Historically low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike,” NAR chief economist Lawrence Yun said in the report. “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.”
Where foreign investment is coming from and going to: Canadians represented 13% of all international buyers during this period, followed by Chinese and Mexican buyers, which each tallied 11%. Indian buyers accounted for 10% of all international purchases during this period. But in terms of price volume, Chinese buyers spent $7.5 billion on U.S. homes, while Indians spent $4.1 billion, Mexicans spent $2.8 billion and Colombians spent $0.7 billion.
Upwards of 25% of Chinese buyers purchased homes in California while Florida led overall in terms of foreign investment with 20% of all international buyers. Texas accounted for 13% of international purchases, California represented 11%, Arizona had 5% while Georgia, New Jersey, New York and North Carolina each accounted for 4% of international home transactions.
A closer look at restrictions on non-U.S. buyers: Some states have introduced new rules to curb certain foreign purchases. For example, Florida introduced a law — SB 265 — that went into effect last summer, restricting real estate purchases by buyers from China, Russia, Iran, North Korea, Cuba, Venezuela and Syria. The measure introduced tough penalties — violating the law is a felony for Chinese nationals, but it’s a misdemeanor for buyers from the other targeted countries.
The National Fair Housing Alliance (NFHA) and the Asian Real Estate Association of America (AREAA) were among those filing suit against the state of Florida in May, alleging that the law is xenophobic and unconstitutional.
Canada, meanwhile, has taken nationwide action, banning foreign buyers in 2023 — with some exceptions — then earlier this year extending the ban through 2027.
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