Foreign-born homebuyers are looking elsewhere

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Published Date 7/22/2024

If you’d rather foreigners buy homes elsewhere and leave the rest to us, you’d be thrilled right now. MarketWatch’s Aarthi Swaminathan reports that foreign buyers are fleeing the U.S. housing market, with sales to buyers from outside the U.S. falling to an all-time low.

According to a recently released report by the National Association of Realtors international buyers purchased 54,300 homes, worth $42 billion in total, in the 12 months through this March — down 36% from the year-earlier period, falling for the seventh year in a row. That figure is now at an all-time low since the NAR began tracking the data in 2009.

Foreign buyers tend to buy high end and in cash. The median purchase price among non-U.S. buyers was $475,000, compared with $392,600 for all existing homes sold. And half of foreign buyers forked over cash, versus 28% of all existing-home buyers.

What happened, you may ask? Currency shifts attributed to the declining sales to foreign buyers. “The strong U.S. dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners,” Lawrence Yun, chief economist at the NAR, said in a statement. “Therefore, it’s not surprising to see a pullback in U.S. home sales from foreign buyers.”

Low inventory didn’t help. “Historically low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike,” Yun said.

Which country tops the list for buying our homes? Canadians, followed by the Chinese, Mexicans, East Indians and Columbians, with the top destinations for their dollars being Florida, Texas, California, Arizona and Georgia. But it was buyers from China that had the deepest pockets, with the highest average purchase price at $1.3 million, the NAR said. They were also more likely to buy in more expensive states: 25% bought a property in California, and 10% in New York.

Swaminathan reports that Florida was the top destination for foreign buyers, led by buyers from Latin America. “About 35% of foreign buyers in the state were from Latin America—which includes Mexico, Colombia and Brazil, among other countries—while 27% were from China.”

Some of this is over politics, evidently. Swaminathan cites ISG World’s Miami-based chief executive Craig Studnicky, who told MarketWatch in an interview that most of his buyers from the Latin America region were motivated by political concerns in their home countries, leading them to park their money in Florida.

“Political shifts in places like Brazil, where leftist president Luiz Inácio Lula da Silva returned to office last year, and Colombia, where the country’s first-ever left-wing president Gustavo Petro came to power in 2022, are leading some of Studnicky’s clients to purchase property in the U.S.,” he said, adding that Miami is ‘Plan B’ for all South American families. “When there’s total chaos in South America—when the wheels fall off the bus, and they’re moving money out.”

MarketWatch, Realtor, TBWS

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