Foreign home buyers are pulling away from the U.S. despite a weaker dollar. International buyers spent 19.1% less on U.S. homes in the 12-month period ending in March compared to the previous year, while the number of purchases fell 14%, according to data from the National Association of Realtors released Wednesday.
Spending drops to lowest level since 2009
International buyers spent a total of $45.3 billion on 67,100 homes during that period. The report notes this is the second lowest figure since NAR began tracking the data in 2009. Canadians bought 16% of those homes, putting them at the top of the list.
The decline in foreign home buyer activity mirrors the decline in international visitors and tourists to the United States, NAR chief economist Lawrence Yun said in a news release. Even a slightly weaker U.S. dollar over the past year, which provides more purchasing power for foreigners, did not induce more activity.
Canada’s spend of $5.2 billion was 16.1% below the previous year and the lowest of any year besides 2021, during the pandemic, according to NAR. Canadian tourism has similarly been in freefall as relations with the U.S. sour, Canadian government data shows.
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While Canada led the pack in total purchases, mainland China, Taiwan, and Hong Kong buyers spent the most money, as they typically bought higher-priced homes, primarily in California. India and the U.K. rounded out the top five in sales volume.
Across all deals, Florida took 20% of the spoils, California trailed just behind at 19%, followed by Texas, New Jersey and Georgia. Like the buyers from China, California was also the top destination for those from the U.K. and Mexico, alongside Texas. Florida, meanwhile, was the top destination for Canadians. Buyers from India helped raise New Jersey and Georgia into the top five states for foreign buyers, knocking out previously ranked New York and Arizona.
Policy shifts and market conditions
The broader housing market in the U.S. has also been in an extended dry spell, except for the luxury segment. For Americans, high mortgage rates and affordability seem to be the biggest obstacles. Foreigners also have to contend with the rapid policy changes introduced by the Trump administration, including tariffs, stiffening immigration laws and shifting international relations.
The top three reasons foreign homebuyers gave for not making a purchase were difficulty in finding the right property, cost and immigration laws, all of which increased relative to the previous year, according to the report.
