Foreign Purchases of U.S. Homes Drop to $45.3 Billion as Capital Shifts Overseas

Foreign investment in U.S. residential real estate experienced a sharp decline between April 2025 and March 2026, with total transaction volume dropping 19.1% to $45.3 billion. According to data from the National Association of Realtors, overseas buyers acquired 67,100 existing homes during the 12-month period—a 14% drop from 78,100 homes in the previous cycle—marking the second-lowest purchase count recorded since tracking began in 2009.

The contraction occurred despite a weakening U.S. dollar, an economic condition that typically boosts overseas purchasing power and encourages international acquisitions. The median purchase price for foreign buyers stood at $465,000, but transaction friction, escalating acquisition costs, and shifting policy environments slowed overall market participation.

Geographic preferences among foreign investors also saw noticeable shifts. Florida maintained its position as the leading market, capturing 20% of all international sales, followed by California at 19% and Texas at 12%. However, New York fell out of the top five state destinations—a rarity in historical tracking—and was replaced by New Jersey and Georgia, which each accounted for 4% of transactions.

Matt Christopherson, Director of Business and Consumer Research at the National Association of Realtors and author of the analysis, noted that regulatory and trade shifts contributed to investor hesitation. Potential buyers faced inventory limitations and high transactional hurdles, leading many to adopt a cautious stance amid shifting state-level property laws and evolving federal trade policy during Donald Trump’s administration.

In New York City, local policy changes added to market complexity. The administration of Mayor Zohran Mamdani instructed the Department of Finance to publish a public, searchable database of non-primary residential properties valued at $1 million or more. The initiative targets properties potentially subject to a proposed citywide pied-à-terre tax, which City Hall estimates could generate up to $500 million annually, while the New York City Comptroller’s office projects revenue between $340 million and $380 million. The public registry sparked concerns over property privacy among high-net-worth foreign owners and domestic real estate investors.

Canadian buyers represented the largest foreign demographic by transaction count, accounting for 16% of total purchases. China, which previously held the top spot in total dollar volume, dropped to third place in transaction volume.

Concurrently, cross-border capital flows from American buyers purchasing property abroad increased. Approximately 10% of real estate professionals reported working with U.S. clients actively seeking residential real estate in foreign jurisdictions. American buyers abroad demonstrated strong liquidity, with 52% completing acquisitions entirely in cash, compared to the 48% cash-purchase rate among foreign buyers acquiring U.S. property.

Mexico emerged as the premier destination for outbound U.S. residential capital, followed by Portugal and Canada. Demand for Portuguese real estate remained robust despite Portugal ending its residential real estate golden visa pathway following domestic housing pressures, driven largely by sustained market momentum and referral networks among American buyers seeking international property options.

Institutional wealth management research highlights broader capital allocation trends among high-net-worth individuals. Darlene Patterson, Global Head of Client Solutions at Citi Wealth, reported an unprecedented rise in U.S. clients seeking to book assets outside the United States to manage political risk and secure residency alternatives in jurisdictions such as Italy, Portugal, Jersey in the Channel Islands, Australia, and New Zealand. Citi Wealth’s “Wealth Beyond Borders” report estimates that $3.06 trillion will move into major wealth management hubs—including Hong Kong, Singapore, Switzerland, and the United Arab Emirates—between 2025 and 2029.

A separate study by the UBS Global Family Office revealed that 60% of surveyed family offices plan significant portfolio reallocations—nearly double the historical baseline. Approximately 30% reported reducing or considering reductions in U.S. dollar-denominated assets due to concerns over trade tariffs, currency devaluation, and valuations in the technology sector. However, U.S. family offices simultaneously increased their domestic asset allocations from 86% to 88%, signaling strategic diversification rather than complete capital liquidation.

Data from cross-border firm Apex Capital Partners further underscores high-earner asset mobility. A survey of 1,733 Americans earning over $200,000 annually conducted by the firm found that 61% would consider moving abroad within five years, while 63% have considered diversifying assets globally. Survey respondents cited tax burdens and the cost of living (68%) as primary drivers ahead of political considerations (54%). Founder Nuri Katz, who has managed international client mobility for 34 years, noted that while 42% of prospective movers target Europe, interest is expanding toward alternative jurisdictions in the Caribbean and Argentina as high-net-worth individuals hedge against potential dollar devaluation and shifting fiscal policies.