OVER THE PAST DECADE, the U.S. Department of Agriculture reported that foreign investment in U.S. real farmland increased by an average of about 2 million acres a year from 2015 to 2021. Meanwhile, international buyers purchased $59 billion in U.S. residential property between April 2021 and March 2022, an 8.5% year-over-year increase, according to a report from the National Association of Realtors (NAR).
However, according to the 2023 report from NAR, the number of homes purchased by international buyers fell to its lowest level in at least 14 years as foreign investors grapple with the same market headwinds of higher interest rates and limited supply faced by domestic buyers.
Another dynamic could be impacting purchases of U.S. real estate by foreign buyers as well. Not only is the federal government considering legislation that would limit some foreign investors from purchasing U.S. real estate, bills with similar restrictions also have been passed or introduced in half of the states.
All told, more than 140 bills have been introduced at the state level that would restrict the purchase of U.S. property by certain foreign entities and individuals. Legislation has been passed in 14 states just this year. Laws in Arkansas, Florida, Louisiana, North Dakota, Tennessee and Utah impact all property in each state. Other laws are limited to agricultural land or land near military or critical infrastructure.
“Given the rapid introduction of these bills and the bipartisan support for them, ALTA quickly pulled together a work group that met several times over a week and a half to discuss the industry and consumer impact of these proposals,” said Elizabeth Blosser, ALTA’s vice president of government affairs. “Any law regarding ownership of U.S. property should establish specific processes and procedures to protect the valid property interests of American sellers, lienholders and future property owners and the reliability of land records.”