Foreign buyers are fleeing the U.S. housing market, with sales at a record low

International buyers are pulling back from the U.S. housing market as high prices and limited supply create significant obstacles. Recent reports from the National Association of Realtors (NAR) and CNBC reveal that the number of homes bought by international buyers has dropped to the lowest level ever recorded.

Decline in Foreign Investment

Between April 2023 and March 2024, foreign buyers acquired 54,300 existing homes in the U.S., marking a 36% decrease from the previous year. This drop represents the lowest level of international investment since NAR began tracking this data in 2009. Additionally, the total dollar volume of these purchases fell by 21%, totaling $42 billion.

Several factors are driving this decline. The high cost of U.S. homes, coupled with a strong U.S. dollar, is a major issue. Lawrence Yun, NAR's Chief Economist, noted, "The strong U.S. dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners." As a result, international buyers are finding it harder to justify the investment.

Record Spending Despite Fewer Purchases

Despite the overall drop in purchases, those international buyers who did invest spent record amounts. The average purchase price for foreign buyers was $780,300, with a median of $475,000. Approximately 18% of these buyers purchased properties valued at over $1 million, indicating that while the number of buyers is down, those who do invest are opting for higher-priced homes.

Challenges Beyond Prices

Foreign buyers encounter additional challenges beyond high prices and a strong dollar. Issues such as navigating the U.S. credit system, transferring funds internationally, and adapting to unfamiliar real estate practices contribute to the difficulties. Yuval Golan, CEO of Waltz, noted, "We don’t have a credit score, we have a weird name, we have a different passport... There’s additional foreign currency exchange that we need to deal with."

Waltz aims to ease the process for foreign buyers by offering a streamlined, remote experience for purchasing U.S. real estate, including setting up LLCs, U.S. bank accounts, and managing currency exchanges.