While many Americans have dropped out of the housing market in recent months, with sales falling year-over-year in six out of the past eight months, the number of foreign buyers snatching homes in the U.S. has risen despite growing economic concerns and historically high mortgage rates.
Sales of existing homes to foreigners hit $56 billion in the year through March 2025, according to the National Association of Realtors (NAR), up by a third compared to a year earlier. Meanwhile, this spring the U.S. housing market reported its worst-selling season in over a decade among domestic buyers.
The two things, experts say, may be connected, as foreign investors take advantage of the vacuum left by struggling American homebuyers.
Why Are Foreign Buyers Purchasing More Homes?
Demand from U.S. homebuyers has dropped in recent months, as mortgage rates remained between 6.5 percent and 7 percent and prices kept rising year-over-year in most of the country, with some exceptions in those markets that became most overheated during the pandemic.
Less demand from Americans, which is slowly putting downward pressure on home prices, has made it easier for foreign buyers to swoop in, especially as the value of the U.S. dollar against other currencies dropped by 11 percent in the first half of the year, according to Morgan Stanley.
In fact, according to the NAR report on international buyers, foreign buyers were more likely to pay all cash (47 percent of their purchases in the year up to March were all cash, compared to 28 percent overall) and to buy more expensive properties.
"For U.S. residents, we're in a period where mortgage rates are high, and the cost of homes as a percent of income is very high—this is driving demand down, but the same factors don't hold back non-U.S. buyers who want to deal in all cash," Mike Chambers, CEO of real estate tech startup Ridley, told Newsweek.
"Added to that, the weakening of the dollar means that homes are actually cheaper for some non-U.S. buyers, making investment more attractive."
Foreign buyers are also proving to be unaffected by concerns over the impact of the Donald Trump administration's sweeping tariffs on the U.S. economy. "That said, this is the first year-over-year increase in the number of properties purchased by non-U.S. buyers since 2017, so we're still a long way down from the peak," Chambers said.
"U.S. real estate has traditionally been viewed as a safe investment, especially in these markets, and rather than impacting potential buyers negatively the administration's economic policies actually made investment more attractive due to the impact on the dollar."
Additionally, Americans' struggle to get onto the property ladder is pushing an increasing number of households to rent instead of buying, increasing the margin for investors and landlords.
In 2023, the latest data made available by the U.S. Census Bureau's American Community Survey, there were an estimated 45.6 million renter-occupied housing units in the country, up from 39.7 million in 2010.
While rental prices have widely stabilized after spiking during the pandemic, 85 percent of landlords increased rent prices in 2024, with nearly one-third raising them by 6 to 10 percent, according to a recent report by Baselane.
Are High Mortgage Rates Not Discouraging Foreign Buyers?
While foreign buyers still face the same high monthly payments that Americans do, they are not undeterred from them the way U.S. buyers are.
"The real estate markets in their own home countries are characterized by high interest rates and/or low yields," Yuval Golan, founder and CEO of real estate financing platform Waltz, told Newsweek.
"In addition, savvier investors might still take a mortgage with the higher rates, as there is less competition in the market, but refinance later on so that they don't lose opportunities now and can get better rates later."
New data from Waltz shared with Newsweek has shown that during the first two quarters of 2025, 23 percent of the inquiries the company received were from foreign investors looking to refinance, versus 77 percent looking to buy a new property. But 59 percent of the deals Waltz closed were refinances—and a majority of those were in Florida (26 percent), Ohio (17 percent), and Texas (12 percent).
This is reflected by the data reported by the Mortgage Bankers Association, which found that refinance applications were up 19 percent year-over-year during the week ending on August 22.
This tells us that foreign real estate investors who may have existing loans at lower rates are still active and unfettered by current rate levels. "Investors who have already purchased properties, potentially even at lower interest rates, are still more active and likely to buy more real estate," Golan said.
"These people don't care as much about rates; they care about the velocity of capital and continuing to scale while there's less competition in the market," he added.
Where Are Foreign Buyers Purchasing US Homes?
One of the advantages that foreign buyers have over U.S. buyers, is that they can be more flexible about where they purchase a property, as they are not necessarily bound to a job, family or a relationship.
According to data from NAR, almost 50 percent of homes purchased by foreign buyers over the past year are in Florida, California and Texas.
"Those markets don't represent much of a change; Florida has been at the top of this list for 15 years or more," Chambers said. "The most common reason behind these purchases and markets is buyers looking for vacation or investment properties."
Florida has been the most popular destination for foreign buyers for 15 years, but there is an additional perk now for those hoping to get a vacation or retirement home in the state: prices are falling.
The Sunshine State, where demand exploded during the pandemic, has experienced a starker correction than the rest of the country in recent months, and prices have now been falling for five consecutive months at the state level, according to Redfin data. In July, the median sale price of a home in the state was $404,200—a good deal for investors.
What Does This Mean for the Broader Housing Market?
On the one hand, Chambers think that rising foreign real estate investment in the U.S. helped to cushion against weak domestic sales. On the other hand, however, increased non-U.S. investment also naturally keeps prices high in certain markets, he said.
"The housing market is so diverse that it's difficult to give one general answer here, but certainly in markets with high outside investment this is not helping make homes more affordable for Americans who are already dealing with an affordability crisis," he said.
Read the full interview with Yuval Golan, founder and CEO of real estate financing platform Waltz:
Q1: How did foreign buyers remain shielded from high mortgage rates?
A1: "Some foreign investors remain unaffected by the high mortgage rates in the U.S., as the real estate markets in their own home countries are characterized by high interest rates and/or low yields.
"In addition, savvier investors might still take a mortgage with the higher rates, as there is less competition in the market, but refinance later on so that they don't lose opportunities now and can get better rates later."
Q2: Where are they buying/refinancing? And why are they choosing these states?
A2: "International investors are typically focused on states that are landlord-friendly or have tax incentives that support foreign investors. They also tend to focus on stable real estate markets that show strong rental demand or that have high appreciation potential. Among these, at Waltz, we see strong interest in Florida, Texas, Ohio, and New York for purchase and refinancing."
Q3: What nationalities are they—and what does this tell us?
A3: "Top nationalities that showed interest with Waltz in real estate financing in the U.S. this past year include investors from Canada, Latin America (mostly from Mexico, Colombia, and Brazil), as well as the U.K. and Israel.
"For some of these investors, capital and portfolio diversification is the main motivation, while exchange rate and local currency stability drew their attention to the more attractive market of U.S. real estate. Those refinancing are often only now realizing they can refinance their cash-only purchase in an easier and faster way, which unlocks their opportunity to leverage their equity and expand their portfolios—despite higher rates."
Newsweek