Foreign Buyers Pull Back From U.S. Market: What Dubai Investors Should Watch

Foreign investment in existing U.S. homes continued its decline in the past year with international buyers purchasing 67,100 existing homes from April 2025 through March 2026, a decrease of 14% from the same period in the previous year. The total transaction value of foreign investment in existing homes was $45.3 billion, down 19.1% from the previous year2s total of $55.8 billion. Foreign investment in existing homes has declined to the second lowest level of foreign investment in existing homes since NAR began tracking this data in 2009.

Despite the decline in the U.S. dollar, foreign2s purchasing power increased. However, foreign demand did not increase as a result. The decline in foreign demand for U.S. real estate is related to the decline in international travel and tourism.

The countries purchasing the largest volume of homes are Canada (16% of total foreign buyers), Mexico (14%), China (13% of total foreign transactions), and then the rest of the world (53% of total foreign transactions). Foreign buyers are primarily purchasing in Florida (20% of all foreign transactions) followed by California ($1M on average) where the Chinese are spending the most in relation to the amount of transactions.

Interestingly, over half of foreign buyers are recent U.S. residents or hold a visa that allows them to live in the country. Foreign cash buyers comprised 48% of foreign transactions, compared to 28% of all U.S. transactions that were all cash. Foreign cash buyers, in many cases, were able to close on properties that other buyers could not, as they were ready to close immediately.

The downturn in the market for foreign investment in residential property in the US could lead to a boost in investment in alternative locations around the world. However, high property prices and a lack of supply of quality property across the globe are starting to become a theme that is being felt by investors. Additionally, the decrease in international travel also has the potential to impact the luxury property market in locations such as Dubai where many luxury properties are sold to affluent tourists and second home buyers.

Implications for Dubai Buyers & Investors:

1. Keep an eye on the international travel for luxury property purchases made by tourists and other transitory foreign buyers.
2. Dubai: The percentage of cash buyers on the market, and how it compares to the U.S. 2 a higher percentage here may lead to buyers willing to pay a higher premium for properties of good quality and location.
3. In Dubai, it is also worth analyzing the profile of foreign investors in real estate compared to those who are resident in the country (even with a residency visa).
4. Price vs. Quality in Location: While some U.S. properties held the line of foreign demand despite an unfavorable exchange rate, higher priced properties in some cases were put on the backburner by international property buyers. Are there similar overvalued luxury property investments waiting to be revealed in Dubai?

The US data is of more significance to understanding international property investment than might at first be apparent and goes to highlight an important point with respect to Dubai property investment 2 that such investment is influenced by a host of factors including immigration, mobility, and broader economic issues. The way in which Dubai2s real estate investment market develops will have much to say about the country2s wider investment prospects beyond 2026.