How to Stop Foreign Buyers From Killing the American Dream of Homeownership
Key Findings
- Foreign buyers are crowding out Americans’ ability to buy homes.
- Many of these foreign homebuyers are foreign investors from economic rivals.
- Other countries have successfully banned or heavily taxed foreign buyers.
Overview
Homeownership has long been an essential element of the American Dream, but it remains out of reach for many Americans. Under President Biden, the cost of homeownership soared. Median home prices spiked by more than 20 percent, monthly mortgage payments more than doubled, and interest rates skyrocketed from 2.7 percent in January 2021 to seven percent in January 2025.1 As a result, the median age of first-time homebuyers is now 40, and the median age of all homebuyers has climbed to 59.2-3 First-time homebuyers have dipped to a record low of 21 percent of all buyers.4 Serious supply shortages put a strain on the housing market, causing everyday Americans to compete for limited homes.5
For generations, homeownership has defined American living, providing the best options for building wealth and raising a family. There are many factors creating headwinds for would-be American homeowners, but foreign buyers are a dominating force pushing the opportunity of homeownership out of reach. It is one thing for Americans to compete with other Americans to buy a home, but to keep up with the billions of dollars flowing in from foreign investors is an impossible task. Much like how Chinese government entities are purchasing American farmland, foreign economic rivals are buying up American homes en masse, placing upward pressure on prices and leaving Americans out of the housing market altogether. This is both a missed opportunity to raise billions in federal revenue and a barrier to Americans’ dreams of homeownership. Lawmakers must prioritize Americans in homeownership policy by taxing foreign buyers.
Foreign buyers are crowding out Americans’ ability to buy homes
Strong private property rights and a stable market make U.S. real estate attractive to foreign buyers. From April 2024 to March 2025, foreign buyers purchased $56 billion worth of homes in the United States—a 33 percent annual increase.6 These foreign buyers purchased more than 78,000 American homes.7 Nearly half of these transactions were all-cash transactions, which are more vulnerable to money laundering and fraud.8-9 The all-cash nature of many of these purchases outcompetes many Americans, such as a first-time homebuyers who may need financing. Only 29 percent of American buyers are all-cash.10 Moreover, only eight percent of first-time buyers are all cash.11
Many foreign buyers will not even live in the U.S. homes that they purchase. A whopping 60 percent of non-resident foreign buyers intend to use the homes for rental investments or as a vacation home.12 More than 60 percent of purchases by foreign buyers are detached single-family homes, and most are in suburban areas, putting foreign buyers in direct competition with American families.13
Open border policies and record-high immigration have exacerbated the problem. Making matters worse, the Biden administration prioritized giving government-backed housing to illegal aliens.14 Recently, the Trump administration updated residency requirements for Federal Housing Administration-insured loans.15 The Trump administration is once again prioritizing American citizens in federal housing programs.16
Many foreign buyers are foreign investors from economic rivals
The foreign buyers that are purchasing American homes are often from America’s economic rivals and geopolitical competitors. More than one-third are from China, Canada, or Mexico.17
Some foreign buyers are far more likely to engage in all-cash purchases.18 Seventy-one percent of Chinese buyers, for example, made all-cash purchases.19 Nearly 60 percent of Canadian buyers made all-cash purchases. While 49 percent of Canadian buyers intend to use their acquired house solely as a vacation home, 45 percent of Chinese buyers intend to use it as a primary residence to secure permanent residency.20 These geopolitical foes on the world’s stage are crowding out home purchases by everyday Americans.
Other countries have successfully banned or heavily taxed foreign buyers
Many nations have restrictions on foreign purchases of their land. The United States is among the most permissive when it comes to the treatment of foreign buyers.21
There is substantial precedent for imposing taxes on foreign buyers.22-26 Singapore, for example, imposes a 60 percent stamp duty—among the highest in the world—on foreign home purchases.27 This is expected to curb excessive foreign demand. Spain is considering a 100 percent tax on real estate purchases by non-European Union buyers in an attempt to ease the pressure on local buyers.28 Canada bans most foreign purchases of homes.29 There are limited exceptions where foreign buyers are permitted to purchase Canadian property, and these investments are heavily taxed. Ontario and British Columbia tax foreign buyers at 25 percent and 20 percent, respectively, in an effort to address the effects of foreign purchases on local Canadian housing markets.30 Foreign buyers of Canadian homes might also face an annual underused housing tax.31 This tax was levied on vacant or underused housing in Canada and is equal to a percentage of the home’s value.32
Even in countries that do not impose prohibitive taxes, many resort to severe restrictions. China bars foreign real estate investment and limits foreign individuals to one primary residence, where the buyer must reside, available only after at least one year of lawful residency.33
The Bottom Line:
Lawmakers should prioritize Americans in homeownership policy by taxing foreign buyers.
Foreign buyers are scooping up U.S. homes while Americans struggle to purchase property in their own homeland. Foreign countries are already taxing Americans who buy homes abroad, yet foreign purchases of American homes go untaxed. It is time for that to change.
Policymakers should prioritize American homeownership and levy a tax on foreign buyers. This would not only raise substantial revenue but also help to address the homeownership crisis that has unfolded as billions in home purchases each year go to foreign investors, while everyday Americans cannot find a home.
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