International buyers sharply retreated from the U.S. housing market over the past year, purchasing just $45.3 billion worth of existing homes between April 2025 and March 2026, an investment decline that indicates capital is fleeing the American real estate sector. The 19.1% drop in dollar volume came despite a weaker U.S. currency that traditionally makes properties cheaper for overseas purchasers, according to data from the National Association of Realtors (NAR).
Capital Flees Despite Favorable Exchange Rates
Transaction counts fell 14% to 67,100 properties, the second-lowest total since record-keeping began. NAR Director of Business and Consumer Research Matt Christopherson expressed surprise at the pullback, noting that the strengthened purchasing power of foreign currencies failed to translate into sales. “Despite foreign buyers having stronger buying power with more favorable exchange rates, we still saw them draw back,” Christopherson said, attributing the hesitation to a “wait and see approach” driven by domestic trade policy turbulence and shifting state property laws.
For American workers, the flight of foreign capital signals a cooling of an overheated market that has consistently priced middle-class families out of homeownership. Reduced competition from overseas speculators should place downward pressure on prices in urban centers, though the report notes that the inability to find the right property and high costs remained the top barriers for those who still sought to buy.
New York Displaced Amid New Tax Regime
In a notable shift, New York state fell from the top five destinations for international buyers, replaced by New Jersey and Georgia. The displacement occurred just as the New York City Department of Finance published a searchable database of properties subject to the city’s new pied-à-terre tax on non-primary residences valued at $1 million or more. The administration projects the levy will raise as much as $500 million annually, though the comptroller’s office estimates revenue closer to $340 million to $380 million.
“There might be a little bit of trepidation of these investors saying, ‘Let’s hold off and wait till it’s a little more certain that we can keep these [properties] and make these investments,” Christopherson stated.
Florida remained the top destination with 20% of foreign buyers, followed by California and Texas. Canada led by purchase volume at 16%, while China dropped to third in transaction count. The national median purchase price stood at $465,000.