According to a recent report from the National Association of Realtors®, international buyers purchased 7.9 percent fewer residential properties over the past year than they did at the same time last year. While buyers from outside the U.S. did purchase 84,600 existing homes, this number is the lowest since the National Association of Realtors® began tracking this data in 2009.

For the period covered by the report, April 2022 to March 2023, foreign buyers accounted for about 1.8 per cent of all home sales.

As home sales have declined nationwide, we've also seen a corresponding decline in purchases by foreign buyers, said Matt Christopherson, NAR's senior research survey analyst.

The report is based on a NAR survey of nearly 7,500 real estate agents who serve non-citizens with permanent residences outside the U.S., new immigrants who have lived in the U.S. for less than two years at the time of a real estate transaction, or non-immigrant visa holders who are residing in the U.S. for professional, educational or other reasons.

One point to note is that only existing home sales are included in the report; newly constructed homes and condominiums are not counted.

However, with today's overheated real estate market, it's to be expected that foreign buyers are spending less money on more properties. Compared to a year ago, they are spending 8.5 per cent more, as current home prices weigh on their wallets, and they are spending a total of $53.3 billion on US homes.

While this sounds impressive, it represents a small fraction of the $2.3 trillion in total existing home sales.

While foreign buyers pumped a lot of cash into the U.S. real estate market, that number dropped dramatically compared to 2017. That year, foreign buyers spent a record $153 billion on U.S. residential real estate.

A $100 billion decrease in six years begs the simple question: what happened?

In recent years, it's been easy to understand why foreign homebuyers stayed put: because of COVID-19 travel restrictions. However, while the epidemic has largely subsided, the remaining waves are still rippling through the housing market.

While nearly all COVID-related travel restrictions have been lifted, the global economy is still recovering from the pandemic, which has slowed the return of foreign buyers to the U.S., says Christopherson. In addition, while foreign travel to the U.S. has largely recovered, the number of foreign visitors is still below pre-pandemic levels.

As home prices soar, foreign homebuyers may also face the same affordability challenges as those in the U.S. The median list price for a home in June was $445,000, just below the all-time high of $450,000 in 2022, and the median list price for a home in the U.S. was $450,000 in June, just below the all-time high of $450,000 in 2022, as well.

In fact, foreign buyers making offers on U.S. soil are spending more than ever, with a median of $396,400, the highest ever recorded by the NAR. Last year's median was $366,100.

Half of foreign homebuyers do not use their U.S. property as their primary residence, but rather as a holiday home, rental home, or both.

Which states are most popular with international buyers?

Foreign buyers purchasing U.S. homes continue to favour Florida. The Sunshine State's leading homebuyers come from Latin America (46 per cent) and Canada (24 per cent).

Florida continues to be the top destination for foreign buyers purchasing a home in the U.S., accounting for 23 percent of all foreign buyers purchasing a home, Christopherson said.

California came in second, accounting for 12 per cent of foreign purchases. The Golden State is the top destination for Chinese and Indian buyers.

Two years ago, international buyers accounted for 16 per cent of existing home sales in the state.

Cara Ameer, a broker with Coldwell Banker, which has licences in California and Florida, said: 'We have observed a significant decrease in foreign buyers in the California real estate market after the pandemic. Foreign buyers are essentially non-existent in the California and Florida real estate markets.

Texas is in third place with 12% of international buyers. Texas is favoured by Mexican buyers due to its proximity to Mexico and lower home prices than the rest of Mexico.

Following the top three is North Carolina with a 4% share, with nearly half of the buyers coming from Asia/Oceania.

Arizona and Illinois also attracted 4% of foreign buyers. Canadians favoured Arizona, while the Granite State attracted the Asian/Oceanian crowd. New York, Ohio, Pennsylvania and New Jersey topped the foreign buyer totals.

Which foreign buyers spend the most?

Chinese buyers invested the most cash in US property, spending a total of $13.6 billion. They were closely followed by Canadians, who paid a total of $6.6 billion. They were followed by Mexican buyers who spent $4.2 billion. Then came Indian buyers, who spent $3.4 billion, and Colombian buyers, who spent $900 million.

Nearly half of overseas buyers purchased homes in quieter suburbs, with the majority (76 per cent) buying detached single-family homes and townhouses.

But with prices still high, mortgage rates topping 7 per cent and inflation still uncertain, the behaviour of international buyers over the next 12 months is anyone's guess.

As a foreign buyer, buying property in the US has become more complicated and cumbersome," says Amir. I think the reason for the decline in foreign buyers is the economic recovery after COVID, political tensions and the general environment of high prices, high interest rates, currency exchange rates and economic slowdown.