Canada has surpassed China as the largest foreign buyer of U.S. residential real estate, says a new report.

The U.S. National Association of Realtors found that Canadian buyers accounted for 13% of foreign purchases between April 2023 and March 2024, while China and Mexico ranked second at 11% and India placed third at 10%. But Chinese buyers spent the most on U.S. residential properties, $5.9 billion, followed by Canadians who invested $5.9 billion.

The report indicates that Snowbirds (Canadians who winter in the U.S.) flocked to recreational properties in Sunbelt states during a slow investment period, as 45% of foreign buyers purchased a site for use as a vacation home, rental or both.

Most of the purchased properties are located in Florida (20%), Texas (13%), Arizona (5%) and Georgia (4%), according to Chicago-based NAR.

The strong Canadian showing resulted during a time of extremely slow U.S. housing sales activity. International buyers purchased 36% fewer U.S. homes year-over-year, while their total investment fell 21.2% year-over-year to $45 billion.

The 54,300 total sales represented the lowest number of foreign acquisitions of U.S. homes since NAR began tracking foreign-buyer home purchases in 2009.

“The strong U.S. dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners,” said NAR Chief Economist Lawrence Yun in a news release. “Therefore, it’s not surprising to see a pullback in U.S. home sales from foreign buyers.”

The NAR report is based on a survey of 150,000 randomly selected U.S. realtors and members of state and local associations that also conducted surveys of foreign buyers.

“Historically low [U.S.] housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike,” said Yun.

Photo: Royal Bank of Canada