Foreigners are buying US homes again while Americans get sidelined
About 44% of the US properties sold to non-citizens over the past year went to buyers who live outside the country
IN 2018, Luka Malkovich bought two duplexes in Milwaukee for about US$100,000 each. The rental properties became a steady source of passive income, helping him to buy an additional six properties in Wisconsin.
The now 30-year-old conducts most of his business from afar, splitting his time between the US, Serbia and his home country of Montenegro.
From a real estate standpoint, he says, there’s no better bet than America. “It doesn’t matter the administration, doesn’t matter the president – it’s always the US,” Malkovich said. “The perfect time to invest here is always five years ago.”
Malkovich is too young to have experienced the 2008 housing crisis as a homeowner, but many foreigners hold the same optimistic view of the market.
Sales of existing US real estate to non-US citizens hit US$56 billion in the year through March, up 33 per cent from the same period the year before, according to a report by the National Association of Realtors (NAR).
The more than 78,000 existing properties sold to foreign buyers in that time totalled far fewer than what sales reached at the peak of such purchases in 2017, but they represent the first increase in eight years.
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These sales declined from the early years of the first Trump administration into the Covid-19 pandemic, as a strong dollar and a sluggish economic recovery in other parts of the world subdued demand.
In recent years, elevated mortgage rates and home prices have kept many US citizens on the sidelines of the American housing market. While that’s contributed to the worst selling season in more than a decade, it’s also created less competition for foreigners, who often buy in cash and aren’t always attached to specific locations.
Although sales to foreigners account for only 2.5 per cent of the existing US real estate market, the increased demand isn’t helping a once-in-a-generation affordability crisis that’s shutting out many Americans.
“While domestic buyers have been held back and slowed down, those same factors haven’t held back foreign buyers,” says Matt Christopherson, director of business and consumer research at NAR. “They’ve been able to swoop in on those opportunities, especially investment opportunities.”
About 44 per cent of the US properties sold to non-citizens over the past year went to buyers who live outside the country, according to the NAR report.
Many buy real estate to use as a vacation home or share with family members, including children who come to study in the US. Some, like Malkovich, primarily buy homes as investments.
At Waltz, a platform focused on streamlining US real estate financing for foreigners, prospective buyers from places such as Mexico, Canada and Israel are driving an uptick in interest, says Yuval Golan, its founder and chief executive officer.
The weakened dollar – something President Donald Trump has encouraged in both his rhetoric and his trade policies – and less demand from domestic buyers have made it easier for foreign investors to make money from their properties, Golan says.
Plus, high home prices have pushed more US residents into the rental market, squeezing supply and fattening margins for landlords.
It’s an attractive equation for Scotty Mortimer, 44, who has bought five properties in Illinois and Missouri since 2023, despite not visiting the US in 18 years.
The Australian investor runs all his businesses and closes his deals from the Russian farm he lives on with his wife, son and a few chickens. Mortimer acts as a wholesale investor, finding and buying properties and then selling them for a profit to other investors. Midwestern states like Illinois, Indiana and Ohio “are really fantastic for cash flow”, he says.
While the NAR report encompassed only the first two months of the second Trump administration, it offered hope that foreigners’ interest in America isn’t all gone. International investors and tourists have begun to sour on the US in the face of the White House’s global trade war and crackdown on immigration.
For Virginia Marcolin, a 52-year-old real estate investor who lives outside Montreal, Trump’s policies are indeed having a chilling effect.
The Canadian mother of four makes burial shrouds for a living, though she found in US real estate a way to pay for her children’s education. She bought her first American property – a six-bedroom duplex in Castleton, Vermont – last November, which she rents out to students, using the profits to cover her own family’s tuition.
Until recently, Marcolin had thought about purchasing a second US property in Vermont or upstate New York. But since her first purchase, US-Canada relations have deteriorated, with Trump stepping up verbal attacks on her country and making fresh tariff threats.
She’s in the process of closing on a fixer-upper on her side of the border, in St. John, New Brunswick. Even though American real estate generally offers a better return on investment, staying closer to home is “less politically risky”, she says.
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