NAR Report: A Closer Look at Foreign Buyers in the U.S. Real Estate Market

Think you understand foreign buyers? Think again! 

The 2024 International Transactions in U.S. Residential Real Estate report from the National Association of Realtors (NAR) reveals significant shifts in how foreign buyers are purchasing American real estate. That is, when they do purchase – specific hurdles like financing complications and long timelines across time zones often deter well-qualified buyers from completing the process.

The NAR's latest report offers a fresh perspective on the world of foreign real estate investment, revealing trends from the past year. Although there are challenges, the data also highlights exciting opportunities and indicates that the international real estate market is overdue for a solution that will make property buying easier and more efficient.

Let’s dive into the key takeaways from this report.

Key Changes Since Last Year

Foreign Purchases Decrease, but Buyer Interest Remains Steady

The number of existing homes purchased by foreign buyers has notably decreased. During the April 2023—March 2024 period, foreign buyers purchased 54,300 existing homes, marking a 36% decline from the previous year.

Despite the decrease in actual purchases, the fraction of real estate agents who worked with international clients remained stable. About 15% of respondents reported working with an international client, only a slight decrease from 16% in the prior period. 

Demographic Insights

Payment Methods

A noteworthy trend is that half of the foreign buyers paid all cash for their property purchases. This high proportion of cash transactions potentially reflects both the financial capability of these buyers and the potential barriers to obtaining financing.

Purchase Prices

Foreign buyers tend to invest in higher-priced properties compared to the general market. The median purchase price for foreign buyers was $475,000, which is significantly higher than the median price of $392,600 for all existing homes sold in the U.S. 

Additionally, 18% of foreign buyers purchased homes worth over $1 million, a significantly higher proportion compared to the general market, where nearly one in ten U.S. homes now holds a value of at least $1 million.

Top Buying Countries

When it comes to international buyers, it appears that the United States’ neighbors are among the most interested in U.S. real estate.

• Canada claims 13% of foreign buyers, investing a total of $5.9 billion
• China represents 11% with $7.5 billion
• Mexico represents 11% with $2.8 billion
• India contributes 10% with $4.1 billion
• Colombia claims 4% with $0.7 billion

Preferred Destinations

Looking at the data, it’s clear that many foreign buyers dream of sandy beaches and palm trees. Top destinations to buy investment properties include: 

• Florida (20%), for its year-round sunshine
• Texas (13%), for its booming economy and cultural melting pot
• California (11%), for its strong investment potential
• Arizona (5%), for its growing urban centers and “Old West” feel
• Georgia (4%), for its Southern charm and affordability 

Challenges Facing International Buyers

Main Barriers to Purchase

Though many foreigners are interested in buying American real estate, they run into a few issues that make purchases impossible. The top four reasons cited by foreign buyers for not completing a purchase include:

• Inability to find an available property (36%)
• High cost of properties (32%)
• Difficulties in securing financing (17%)
• Inability to move money (11%)

Waltz: Bridging the Gap Between Data and Practice

While the NAR report may seem dire at first glance, we believe the data paints a nuanced picture of international buyers, and highlights a lot of opportunity for companies like Waltz. 

International buyers are eager U.S. property owners with deep pockets, often paying cash. However, financial hurdles like currency exchange and mortgage availability hinder many deals.

Waltz makes investing in U.S. real estate easier and more accessible for foreign buyers. Our paper-free, time zone-transcending platform functions like a stock-trading app but for real estate, creating a quick and productive platform that helps foreign investors realize their American dream.

If you’re an international investor interested in American real estate, or a real estate professional who wants to work with international buyers, reach out to us – we’d love to chat!