Strong dollar and soaring costs price international buyers out of housing market
Foreign buyers are retreating from the US housing market, with sales hitting a record low as home prices become too expensive.
International buyers purchased $42 billion worth of existing homes from April 2023 through March 2024 – a 21.2% plunge from a year ago – according to a new report from the National Association of Realtors (NAR).
The total number of properties bought by international buyers also plummeted by 36% to 54,300, marking the lowest level since NAR began tracking this data in 2009. This decline mirrors the overall trend in US existing-home sales, which fell to 4.09 million in 2023, an 18.7% drop from 2022 and the lowest level since 1995.
"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. "Therefore, it's not surprising to see a pullback in US home sales from foreign buyers."
The report, which surveyed NAR members about transactions with international clients, revealed that foreign buyers who resided in the US as recent immigrants or visa holders purchased $22.6 billion worth of existing homes, a 3.4% decline from the previous year. Foreign buyers living abroad spent $19.4 billion, a significant 35% drop from the prior 12 months.
"Historically low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike," Yun added.
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Despite the overall decline in purchases, the average ($780,300) and median ($475,000) existing-home sales prices among international buyers reached record highs, increasing 21.9% and 19.8% respectively from the previous year. This price surge reflects the overall increase in US existing home prices, which climbed to $392,600.
Chinese buyers continued to lead in terms of purchase price, with an average of $1.3 million per property. Canada topped the list of foreign buyers by country of origin at 13%, followed by China and Mexico at 11% each, and India at 10%. However, China led in total residential sales dollar volume at $7.5 billion.
Florida remained the top 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 popular states for foreign buyers.
The report also highlighted that all-cash sales accounted for half of international buyer transactions, compared to 28% of all existing-home buyers. Non-resident foreign buyers were more likely to make all-cash purchases (68%) than resident foreign buyers (36%).
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