U.S. home purchases by international buyers are at their lowest on record, new NAR data shows. But there’s reason to believe in a comeback.
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Worsening housing affordability and stubborn inventory shortages are not only pushing more Americans out of the real estate market but also blocking many foreign investors from purchasing homes in the U.S., according to the National Association of REALTORS®’ newly released 2022 Profile of International Transactions in U.S. Residential Real Estate.

The annual number of home purchases in the U.S. by foreign buyers was the lowest on record in the 12 months from April 2021 to March 2022, the report shows. International buyers purchased 98,600 U.S. homes in that time, marking a 7.9% drop from the previous year and the lowest number since NAR began tracking such data in 2009. This is the second straight year of steep declines in foreign investment in the U.S. since the COVID-19 pandemic began. NAR Chief Economist Lawrence Yun notes that “restrictions and general caution tied to international travel during the pandemic” continue to hinder demand from abroad. However, he adds, affordability and inventory challenges were the top issues cited by international buyers who decided not to purchase a home in the U.S.

Despite fewer sales, the overall dollar value of foreign home purchases in the U.S. has spiked because of record-high home prices. Foreign investors purchased $59 billion worth of U.S. real estate from April 2021 to March 2022, an 8.5% increase from the previous year, according to NAR’s report. The average and median purchase prices for international buyers have increased 17.7% year over year and reached record highs—$598,200 and $366,100, respectively. (In that same time period, the overall median price for an existing home jumped 10% to $374,300, NAR data shows.) Chinese buyers paid the highest average purchase price at just over $1 million, according to NAR’s report. Nearly one-third of Chinese buyers purchased property in California.

Foreign investors tend to be more insulated from volatility in the U.S. market and likely will return in greater numbers in the future, even as the economy softens here at home, Yun says. “Due to rising interest rates, overall home sales will decline in the U.S. this year,” he notes. “Foreign buyers, however, are likely to step up purchases, as those making all-cash offers will be immune from changes in interest rates. In addition, international flights have increased in recent months with the lifting of pandemic-related travel restrictions.”

A Snapshot of Foreign Buyers

The most number of international buyers in the U.S. from April 2021 to March 2022 came from Canada and Mexico. But Chinese and Canadian buyers spent the most, according to NAR’s report.

  • Canada: 11% of foreign buyers, $5.5 billion in residential sales
  • Mexico: 8%, $2.9 billion
  • China: 6%, $6.1 billion
  • India: 5%, $3.6 billion
  • Brazil: 3%, $1.6 billion
  • Colombia: 3%, $1 billion

Florida was the top U.S. destination for international buyers for the 14th year in a row, accounting for 24% of foreign purchases between April 2021 and March 2022, according to NAR’s report. The following are the states that saw the largest shares of foreign purchases in that time period:

  • Florida: 24%
  • California: 11%
  • Texas: 8%
  • Arizona: 7%
  • New York: 4%
  • North Carolina: 4%

Additional findings from NAR’s report on international transactions:

  • Forty-four percent of foreign home buyers paid cash, nearly double the rate of all existing-home buyers (24%). Nearly 70% of Canadian buyers made all-cash purchases, the highest share among foreign buyers, while Asian Indian buyers were the least likely to pay cash (9%).
  • Forty-four percent of foreign buyers purchased property to use as a vacation home, rental or both.
  • The top reasons foreign buyers cited for deciding not to purchase a home in the U.S. were the cost of the property (65%); the inability to find a property to purchase (57%); the inability to obtain financing, or being unable to qualify for a mortgage (24%); and property taxes (21%).
  • Foreign buyers who resided in the U.S. as recent immigrants or who were holding visas purchased $34.1 billion worth of U.S. real estate, a 5.2% increase compared to the previous year. These buyers accounted for 58% of the dollar volume of purchases.
  • Foreign buyers who lived abroad purchased $24.9 billion worth of U.S. real estate, up 13.2% from the prior year and accounting for 42% of the dollar volume.
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