Foreign Buyers Are Fleeing the U.S. Housing Market, With Sales at a Record Low

Foreign buyers are fleeing the U.S. housing market, with sales to buyers from outside the U.S. falling to an all-time low.

International buyers purchased 54,300 homes, worth $42 billion in total, in the 12 months through this March, according to a report by the National Association of Realtors released on Wednesday.

The number of existing homes purchased by foreign buyers in the U.S. was down 36% from the year-earlier period, the report found. Sales of homes to international buyers fell for the seventh year in a row in March, and to an all-time low since the NAR began tracking the data in 2009.

Foreign buyers in general leaned toward buying more expensive homes than American consumers. The median purchase price among non-U.S. buyers was $475,000, compared with $392,600 for all existing homes sold. Half of foreign buyers paid for homes in cash, versus 28% of all existing-home buyers.

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 was also a factor. The U.S. is seeing a lower-than-normal amount of homes on the market due to a persistent lock-in effect—one where current homeowners, put off by high mortgage rates, see little incentive to sell. “Historically low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike,” Yun said.

The top country of origin for international buyers in the U.S. was Canada, followed by China, Mexico, India and Colombia. The top destinations for their dollars were Florida, Texas, California, Arizona and Georgia.

Buyers from China had the deepest pockets. They had the highest average purchase price at $1.3 million, the NAR said, and also were more likely to buy in more expensive states: 25% bought a property in California, and 10% in New York.

Florida: The top destination for foreign buyers

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.

Craig Studnicky, chief executive at Miami-based ISG World, 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.

“Miami is ‘Plan B’ for all South American families,” he said. “‘Plan B’ basically means when there’s total chaos in South America—when the wheels fall off the bus, and they’re moving money out.”

In Miami, newly built units in certain parts of the city have been selling fast to foreign buyers, said Alejandra Castillo, vice president of sales at Miami-based PMG Residential. On one project that Castillo is working on in the city’s trendy Brickell neighborhood, half of the units were sold in three months, at an average price of $1 million. “Even though it’s a slower market right now, because it’s a slow season, our numbers … are amazing,” she said.

But buyers from Latin America would be even more active in markets like Miami if there were more new condos for sale, Studnicky noted.

A forthcoming change in Florida state law, imposing new regulations on condos regarding structural safety standards, is creating a constraint on inventory. The law was created in the wake of the 2021 Surfside condo collapse, where 98 people died. The law mandates new building-safety standards and regular assessments, which requires millions of dollars in maintenance repairs for some properties.

Potential buyers of condos that require special assessments—and hence repairs—would need to pay toward those expenses, which is discouraging some buyers from acquiring older properties.

The assessments are “tremendously expensive—anywhere from $50,000 up to $400,000 per unit,” Studnicky said. “It’s crazy, and consequently nobody wants to buy that inventory that’s 30 years and older.” Nearly 90% of active listings in South Florida are condos over 30 years old, he added.

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