In a recent interview regarding the findings from the National Association of Realtors, we learned about the current challenges faced by foreign investors in the U.S. real estate market. The report highlights several factors contributing to a significant decline in home purchases by foreign buyers, including soaring property prices, low inventory, and a robust dollar. In fact, home purchases have plummeted to levels not seen in 15 years.

Between April 2023 and March 2024, foreign buyers acquired 54,300 residential properties in the U.S., reflecting a 36% drop from the previous year. The total spending by these buyers has similarly decreased, totaling $42 billion—a 21.2% reduction compared to the same period last year.

Interestingly, despite this decline in the number of transactions, foreign buyers have set a record for the average price paid, now at $780,300, which marks a 21.9% increase from the prior year. The median purchase price for foreign buyers stands at $475,000, surpassing the national median of $392,600.

When it comes to the demographics of these buyers, Canadians represent 13% of all purchases, with both China and Mexico at 11%, and India at 10%; Colombia follows with 4%. Chinese buyers, while spending the most at $7.5 billion in U.S. real estate, have significantly reduced their investments from $13.6 billion last year. Their focus tends to be on high-value states, with 25% investing in California and 10% in New York, averaging around $1.26 million per property—the highest among all international buyers.

For the 16th consecutive year, Florida remains the go-to destination for foreign investors, accounting for 20% of purchases, followed by Texas at 13% and California at 11%. Other states gaining favor include Arizona, Georgia, New Jersey, New York, and North Carolina.

Focusing on California, it’s revealed that 55% of foreign buyers come from Asia and Oceania, while a significant portion also hails from Latin America and Mexico. California is particularly favored by Chinese buyers and ranks as the second most popular state for Mexican buyers.

One notable trend in the report indicates that nearly half of foreign buyers opt for all-cash purchases, comprising 28% of all buyers. For non-U.S. residents, this percentage increases to 68%, although only 36% of foreign residents in the U.S. pay in cash.

Interestingly, more than two-thirds of both Canadian and Chinese buyers make all-cash purchases, while the percentage is slightly lower for Mexican and Colombian buyers. In contrast, Indian buyers, many of whom reside in the U.S. and have access to mortgages, show the lowest rate of cash purchases at just 27%.

In terms of the reasons behind these purchases, nearly half of foreign buyers—45%—acquire homes in the U.S. for vacation, rental, or a combination of both. Notably, 49% of Canadian buyers are likely to invest in vacation hotspots, while 66% of Indian buyers prefer suburban areas for their primary residences. Colombian buyers are particularly inclined toward rental investments, with 68% purchasing for this purpose, while Mexican and Chinese buyers often target properties suitable for students.