The number of houses bought by buyers from abroad has dropped to the lowest levels in more than 14 years, as foreign investors face similar market challenges as buyers from the domestic market, per new statistics by the national association of REALTORS(r).

Low prices for homes and high inventory caused international buyers to buy 14% fewer homes in the past year, according to the report of NAR, 2023 International Transactions in U.S. Residential Real Estate. Real estate experts say the main reasons why their clients from abroad have chosen not to purchase from the U.S. include:

• Property costs (30 30 percent).
• The inability to find the right property (27 percent).
• The inability to secure financing or be eligible for a loan (20 20 percent).

“Sharply lower housing inventory in the U.S. and higher borrowing costs across the world have dented international buyers for two straight years,” states NAR Chief Economic Economist Lawrence Yun. “However, recovering international travel following the end of the pandemic will bring more foreign transactions in the coming months and years.”

But foreign buyers still buying U.S. real estate are spending more than buyers from domestic markets who are typically cash-paying and focusing on the most expensive areas across the country. The median home price for a foreign buyer jumped to $639,900 in the last year, an increase of 7 per NAR’s statistics.

The median purchase cost for an international home buyer was $396,400. This is greater than the $384,000.00 for all homes that were sold. Forty-two percent of buyers from abroad purchase cash, compared to 25% of the total market. Around half of buyers from abroad bought a home to use as a holiday home or rental property, compared to 16% of all homebuyers.

Who’s Buying and Where

International buyers continue to be drawn toward U.S. real estate; because of this, single-family house costs are in good shape. The U.S. remains relatively affordable compared to the price of an apartment in the heart of a commercial district of other nations. Asian buyers comprised the most significant portion of foreign buyers in the U.S. over the past year, with an average percentage of market shares of 38 percent. According to the NAR report, Latin American buyers followed, making up 31% of the market share of international buyers across the U.S.

China has continued to be the most popular country of origin for foreign buyers. Chinese buyers are the most expensive, with an average price for a home of $723,200. Chinese buyers generally concentrated on the U.S.’s most expensive regions in California and New York. Canadian buyers were the next in terms of total spending in individual purchases, which was the median of $572,900. Canadian buyers were the most likely to purchase in vacation destinations like Florida and Arizona.

On the other hand, buyers from Mexico were more likely to purchase the most affordable homes within the U.S.; Texas was the most popular destination for them.

“Home purchases from Chinese buyers increased after China relaxed the world’s strictest pandemic lockdown policy, while buyers from India were helped by the country’s strong GDP growth,” Yun declares. “A stronger Mexican peso against the U.S. dollar likely contributed to the rise in sales from Mexican buyers.”

The report of NAR shows that the following countries are the top buyers from outside the world in U.S. real estate in 2023.