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International Buyers Are Pulling Back from the U.S. Housing Market
July 17, 2024
Potential homebuyers are facing many challenges, such as high prices and limited supply. International buyers, however, also have to factor in the strength of the U.S. dollar relative to other currencies. As a result, overseas buyers are pulling out of the U.S. housing market in a major way.
International buyers purchased 54,300 existing homes in the U.S. between April of last year and March of this year, according to a report from the National Association of Realtors (NAR). That is a drop of 36% from the year prior and marks the lowest level of international investment since the NAR began tracking data in 2009.
In total, international buyers spent $42 billion during the period, down 21% from the year before. The slowdown comes as the average price for an international buyer rose to $780,300, the highest on record for foreign buyers, according to the NAR.
The top buyers, in terms of volume, were from Canada, China, Mexico, and India, and buyers bought the most properties in Florida, Texas, California, and Arizona. In dollar terms, Chinese buyers spent the most money, purchasing higher-priced homes, according to the NAR.
The report only includes data on sales of pre-existing homes, and foreign investors typically buy heavily into newly developed properties, meaning we are only getting part of the story.
The lack of overseas interest may provide some relief for domestic buyers, as supply is already severely constrained and the lack of availability is driving up prices. It should be noted, however, that International buyers account for just 1.3% of all U.S. home sales annually, according to the NAR.
