Foreign Investors Flock to the U.S. Housing Market, Buying $56B Worth of Real Estate
What This Means for American Investors
While sales to non-U.S. buyers only account for 2.5% of the existing market, according to the NAR data, it can increase competition for Americans, wrote George Ellison, cofounder of Propbee and former real estate executive at Bank of America, in an email to BiggerPockets. “That can make it harder for U.S. buyers to secure homes, since foreign buyers often come in with cash offers and fewer contingencies,” he said.
This can put a strain on already tight markets, said Gaddy. “We all know the reality of tight inventory in many cities, and increasing demand from overseas can knock out first-time homebuyers,” he said.
But overall, experts see the interest in American real estate as a good thing. “If foreigners stop buying U.S. real estate, it means people don’t trust [the U.S. dollar], and it harms the economy. When foreigners buy in America, the USD retains its dominance,” said Golan.
If foreign investors are still buying up property despite higher interest rates, it shows that “the fundamentals are strong,” said Ellison.
“International investors see U.S. housing as one of the most reliable places to put their money. It reflects confidence in long-term appreciation and rental demand, even if in the short term, it highlights affordability gaps for many Americans,” he added.
Final Thoughts
While an increase in foreign purchases might cause competition in some areas squeezed by supply, the underlying reason for the increase is a good one for real estate investors. All this foreign investment indicates that the U.S. housing market is still strong.