LOS ANGELES — Sales of U.S. homes to Chinese, Canadian and other foreign buyers have fallen to the lowest level in more than a decade, hampered by a strong dollar and more hurdles that have kept the housing market in a deep sales slump for over two years.
Some 54,300 previously occupied U.S. homes were purchased by non-U.S. citizens in the 12 months ended in March, according to a report this week by the National Association of Realtors.
That’s the fewest sold to foreign nationals in data going back to 2009. Sales were down about 36 percent compared to the same period last year.
Those transactions from April 2023 through March of this year totaled $42 billion, a 21.2 percent decline from the prior-year period, NAR said.
“International buyers face the same difficult market challenges as domestic buyers — lack of inventory, higher mortgage rates, the affordability condition,” said Lawrence Yun, NAR’s chief economist. “On top of that, for many international buyers the stronger dollar was not in their favor.”
The U.S. housing market has been stuck in a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Existing home sales sank to a nearly 30-year low last year as the average rate on a 30-year mortgage surged to a 23-year high of 7.79 percent, according to financier Freddie Mac.
The average rate has mostly hovered around 7 percent, limiting purchasing power for would-be buyers. At the same time, the supply of homes for sale, though rising in recent months, remains close to historic lows. That’s kept the market competitive enough to lift prices to new highs.
On top of those affordability challenges, foreign buyers have to factor in the potential for additional costs when the U.S. dollar is stronger than their currency. An index that tracks the value of the greenback relative to a basket of foreign currencies has risen 3.9 percent over the past 12 months.
“The strong U.S. dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners,” said Yun. “Therefore, it’s not surprising to see a pullback in U.S. home sales from foreign buyers.”
