Why Foreign Investors Keep Buying US Real Estate Despite High Mortgage Rates
Foreign investors keep buying US real estate despite high mortgage rates. Why liquidity, the dollar, FIRPTA planning, and migration paths still drive demand.
By Buying America Editorial · Sat Jul 25 2026 · Real Estate
Elevated mortgage rates remain a visible barrier for the average American homebuyer. Yet global capital keeps flowing into the US property market. A surface reading would say that higher rates should cool down purchases. The strategic reading tells a different story: for many international investors, the United States is not judged solely as a market for cheap debt. It is a platform for liquidity, legal stability, portfolio diversification, dollar-denominated financing, and, in some cases, business or migration planning.
This is not just market sentiment. The National Association of Realtors (NAR) reported that foreign buyers acquired US$56 billion in existing US homes between April 2024 and March 2025, a 33.2% increase over the prior period. They also purchased 78,100 properties, a 44% jump and the first year-over-year rise since 2017. The median price paid by international buyers reached US$494,400, a record for the series. In other words: even as high rates continue to suppress activity among domestic buyers, the international buyer has returned in force.
Why the global buyer reads rates differently
The first explanation lies in the difference between the domestic buyer and the global buyer. For an American family that depends on a traditional 30-year mortgage, a rate near 6% can radically change monthly affordability. For a foreign investor with liquid capital, dollar-based income, business assets, or a wealth-preservation strategy, the rate is just one variable within a broader equation. NAR observed that 47% of international buyers paid in cash, versus 28% among all buyers. That gap matters: cash reduces direct exposure to mortgage costs and allows for stronger negotiation in markets where inventory is beginning to improve.
For a Canadian investor, this dynamic is especially familiar. Snowbirds have long converted CAD into US property to secure a warm-weather base and a dollar-denominated asset. When the Canadian dollar weakens against the greenback, the cost of entry rises for anyone who has not yet converted capital, but for those who already hold US assets, that same move can reinforce the store-of-value function. Exchange-rate risk should be analyzed before closing: when to convert, whether to finance part of the deal in dollars, and how to cover maintenance, HOA fees, taxes, insurance, and vacancies.
Liquidity is the second reason
The United States offers a deep, transparent property market with multiple exits: residential rental, short- or medium-term rental where permitted, resale, refinancing, commercial structures, multifamily, industrial, selective retail, and assets tied to new demand such as data centers, logistics, or build-to-rent housing. For an international investor, liquidity does not only mean selling quickly. It means operating inside a system with buyers, lenders, property managers, insurers, brokers, appraisers, comparable data, and known rules.
A useful discipline here is the "windshield" technique: look left toward risk, look right toward opportunity. On the left sit high rates, insurance costs, local taxes, maintenance, rental cycles, and macroeconomic uncertainty. On the right sit property-rights protection, market scale, financial depth, the appeal of the dollar, and the ability to build wealth outside your home country. A smart decision ignores neither side; it weighs them before buying.
What the risk side looks like
On the risk side, rates still matter. In its July 2025 update, Fannie Mae projected that mortgage rates would end 2026 around 6.0%, with more moderate home-price growth of 1.1% in 2026 on a Q4/Q4 basis. NAR also cited economists expecting improved home sales through 2026 on higher inventory, a weaker "lock-in" effect, and somewhat lower rates, though without necessarily returning to the cheap-money era of the previous decade. For the foreign buyer, this implies opportunity with discipline: do not buy expecting an immediate rate cut, but structure an investment that can be sustained at current rates and benefit if the cost of capital improves later.
What the opportunity side looks like
On the opportunity side, commercial data shows that global appetite for real estate has not vanished. JLL reported in May 2026 that global direct transaction volumes reached US$216 billion in the first quarter of 2026, an 18% year-over-year increase. The same report noted that cross-border investment rose 37% year-over-year to US$55 billion, its strongest first quarter since 2022. Although the figure is global and not exclusively US residential, it confirms a relevant trend: international capital is taking on real-estate risk again, but selectively.
Deloitte, in its 2026 Commercial Real Estate Outlook, described the environment with a measured phrase: cautious optimism. The firm noted that macroeconomic volatility, regulatory uncertainty, and elevated rates have tempered the recovery, but it also highlighted that many global leaders expect improvements in revenue, expenses, and property fundamentals during 2026. Among the most attractive sectors are data centers, logistics, specialized offices, and alternative assets such as health care and telecommunications. The takeaway for an international investor is clear: the United States is not a single real-estate market. It is a set of markets, segments, tax rules, and local dynamics. The opportunity lies less in "buying in the US" and more in choosing the right asset, in the right city, with the right structure, for the right objective.
Where foreign buyers concentrate
International buyers bring particular motivations. In NAR's 2025 report, Canada ranked among the top countries of origin for foreign buyers, and Florida remained the leading international destination with 21% of foreign buyers, followed by California, Texas, New York, and Arizona. These geographies are not random: they combine air connectivity, international communities, business activity, universities, medical ecosystems, tourism, employment, and family or corporate migration routes.
For buyers outside the US, real estate often carries a hedging component as well. Currency volatility can cut both ways, which is why exchange-rate risk deserves a dedicated look before closing a purchase, including what share of total wealth will be exposed to the dollar.
Financing and the tax front
Foreign financing is another central piece. In recent years, credit options for non-residents have grown, with programs that assess international documentation, business income, bank statements, liquid assets, or expected rental flows. These products typically require larger down payments, higher rates than those offered to local buyers, and sufficient reserves. But for investors who do not want to tie up all their capital, financing can enable diversification: buy a property, keep liquidity for improvements or management, and retain capital for future opportunities. The point is not to borrow for its own sake; it is to use debt only if the asset can support it.
The tax front cannot be left out. The IRS reminds buyers that, under FIRPTA, the disposition of a US real property interest by a foreign person is subject to tax withholding, and in many cases the buyer must withhold 15% of the amount realized when purchasing from a foreign seller. This rule does not mean every foreign investor will pay exactly that amount as a final tax, but it underscores the importance of planning from the start: ownership structure, applicable tax treaties, federal, state, and local taxes, withholding, estate succession, allowable deductions, and reporting obligations. Canadian buyers, in particular, should weigh the Canada-US tax treaty and coordinate cross-border filings so that credits are not lost and the same income is not taxed twice. An attractive return can shrink significantly if the tax structure is improvised.
Where property, business, and migration intersect
There is an increasingly visible intersection between real-estate investment, business, and migration. USCIS explains that the EB-5 program was created to stimulate the US economy through job creation and capital investment by foreign investors, either directly or through approved regional centers. Not every property purchase qualifies for a migration strategy, and an individual residential property should not be confused with a structured migration investment. But for many business families, buying US assets is part of a broader conversation: residency, children's education, commercial expansion, asset protection, banking presence, and long-term planning.
The institutional reading of 2026, then, is not that high rates stopped mattering. They matter, and a great deal. The correct reading is that the global investor is not buying "rate" alone; they are buying access to a market with rules, liquidity, depth, and structural demand. When rates fall, the value of certain assets can get an added lift. When rates stay elevated, buyers with capital, patience, and good advice can find less local competition and better negotiating terms. In both scenarios, asset quality and financial structure weigh more than enthusiasm.
The 2026 trend shows a market reopening selectively. There is more inventory than in prior years, more favorable sales expectations, active international capital, and commercial sectors with real demand. At the same time, refinancing risk, operating costs, and regulatory change persist. The investor who understands both sides of the windshield, risk and opportunity, will be better prepared to decide.
At Buying America, our message to international buyers is straightforward: the United States remains attractive, but it should never be bought blind. The market demands analysis city by city, taxes county by county, realistic rental projections, insurance costs, HOA rules, currency risk, and clear exit scenarios. A property can be a tool for wealth, income, expansion, or migration, but only when it is integrated into a complete strategy. Our mission is to help foreign investors build that strategy before they build in the US.