International buyers are becoming less and less likely to purchase homes in the United States. Where are they buying?

The number of existing homes purchased by foreign buyers between April 2022 and March 2023 fell to its lowest level since 2009, according to a recent report from the National Association of Realtors. Foreign buyers purchased $53.3 billion worth of U.S. real estate during this period, down 9.6 percent from the previous year. The number of existing homes sold totaled 84,600, down 14 percent from the previous year.

The decline in the number of available properties in the U.S., rising borrowing rates across the board and a strong dollar are reasons for the slowdown, according to Lawrence Yun, chief economist for the National Association of Realtors. "Among those who expressed interest but couldn't make a deal, they say the reason is because there are no choices," Yoon told USA TODAY. The strong dollar also makes it very expensive for foreigners to buy real estate here," Yoon said.

Historically low real estate, down 14 percent from last year, is also keeping prices high. The number of single-family homes available, at 960,000, is the lowest for June since the association began tracking the data in 1982.

Foreign buyers living in the U.S. as visa holders or recent immigrants (up to two years) purchased $23.4 billion worth of existing homes in the U.S., down 31 percent from the previous year and accounting for 44 percent of total transactions. Foreign buyers living overseas purchased $30 billion worth of real estate, up 20% from the previous 12 months and accounting for 56% of the dollar volume. International buyers accounted for 2.3 percent of the $2.3 trillion in existing-home transactions during the period.

Home prices and international buyers

The average ($639,900) and median ($396,400) sales prices of existing homes among foreign buyers were the highest ever recorded by the National Association of Realtors, exceeding the previous year by 7 percent and 8.3 percent, respectively.

The increase in prices for foreign buyers reflects rising U.S. real estate prices, as the median sales price of all existing homes in the U.S. was $384,200. Among foreign buyers with a median purchase price of $723,200, Chinese buyers ranked first, with one-third - 33% - purchasing real estate in California. Just 15% of foreign buyers purchased properties valued at more than $1 million between April 2022 and March 2023.

Migration

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"Home purchases by Chinese buyers rose after China eased the world's strictest restrictions due to the pandemic, while buyers from India were helped by the country's strong economic development," Yun added. "The strengthening of the Mexican peso against the U.S. dollar likely boosted sales among Mexican buyers. "

Where are foreign buyers buying real estate?

Florida remained the top destination for foreign buyers for 15 consecutive years and accounted for 23% of all international purchases. California and Texas shared second place (12 percent each), followed by North Carolina, Arizona and Illinois (4 percent each).

"Florida, Texas and Arizona continue to attract foreign buyers despite hot summer weather and significant home price increases that began a few years ago," Yun said. Florida's top buyers were from Latin America (46%) and Canada (24%). It was the top spot among Canadian and Colombian buyers.

California had the second largest share of foreign buyers at 12%, up slightly from the previous period. The majority - 61% - of California's foreign buyers came from Asia/Oceania. This was the top spot among Chinese and Indian buyers.

How do foreign buyers finance their purchases?

The proportion of foreign buyers who made full payment in cash was 42%, compared to 26% among all buyers of existing homes. Foreign buyers living abroad are more likely to purchase real estate for cash compared to foreign buyers living in the United States. 52% of foreign buyers living abroad made a cash purchase, compared to 32% among foreign buyers living in the United States. Higher mortgage interest rates may be one reason why the share of homes bought by foreign buyers living in the U.S. is down 20 percent, Yun said.

Swapna Venugopal Ramaswamy is a housing and economic affairs correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our daily money newsletter here.