The U.S. housing market has been in a state of flux, with high mortgage rates pushing many domestic buyers to the sidelines. Yet despite a slowdown among Americans, foreign buyers are seizing the opportunity, pouring billions into residential properties nationwide. That trend is strongly reflected here in New Jersey, where international investors are continuing to purchase homes, drawn by the state’s location, connectivity, and real estate potential.
Recent data shows that sales of U.S. homes to international buyers climbed to $56 billion in the year through March 2025, marking a one-third increase compared to the year prior. At the same time, sales to domestic buyers sagged, with the spring season registering the weakest showing in over a decade. While high interest rates have squeezed many Americans out of the market, international demand is helping to fill the gap.
New Jersey’s appeal to foreign buyers
New Jersey remains one of the country’s most strategic states for international real estate investment. Its proximity to New York City makes it a natural choice for buyers seeking luxury properties without being in the heart of Manhattan. The state’s infrastructure adds to that appeal, with Newark Liberty International Airport serving as a major global gateway and an extensive network of highways and rail lines making travel seamless.
Markets such as Jersey City, Edgewater, and Princeton are particularly popular with international buyers looking for both investment opportunities and lifestyle benefits. Jersey City has seen a surge in high-rise developments with skyline views of Manhattan, while Edgewater offers riverfront properties that appeal to luxury buyers. Princeton remains a draw for those seeking prestige, academic ties, and suburban charm.
In addition to location, foreign buyers see New Jersey properties as a safe and potentially lucrative investment. The U.S. housing market is often perceived globally as stable, and while New Jersey’s property taxes are among the highest in the nation, the long-term value of the market continues to attract interest. More on New Jersey’s housing landscape can be explored here.
Why high mortgage rates aren’t a barrier
For many foreign buyers, the biggest difference compared to domestic buyers comes down to financing. Mortgage rates that hover between 6.5 and 7 percent have proven to be a major roadblock for U.S. residents, but foreign investors often bypass the problem entirely.
Nearly half of all international buyers in the past year paid in cash, compared to less than one-third of all buyers overall. For those who do require financing, alternative loans such as Debt Service Coverage Ratio (DSCR) loans provide a path forward. These loans emphasize a property’s income-generating potential rather than a buyer’s U.S. credit score or income history, making them more accessible to foreign nationals.
As a result, high borrowing costs that discourage American buyers simply don’t apply to a large segment of the international market. Instead, foreign investors are able to move quickly, capitalize on reduced competition, and purchase homes that domestic buyers may no longer pursue.
Unique considerations for foreign buyers in New Jersey
While the national trends largely apply, New Jersey has its own legal and financial details that foreign buyers must navigate. State law includes a mandatory three-day attorney review period for residential real estate contracts, an important safeguard that can alter or cancel agreements in the early stages.
Property taxes are another key factor. New Jersey consistently ranks among the highest in the nation, and international buyers should account for these expenses when assessing potential investments. Additionally, foreign entities are required to register with the New Jersey Department of Treasury before conducting business in the state.
Despite these hurdles, the demand remains strong. The weakening of the U.S. dollar against other currencies, down about 11 percent in the first half of this year, has only heightened the appeal for international investors seeking prime real estate.
A shifting market dynamic
The combination of fewer American buyers and increased international demand is shaping a new dynamic in the New Jersey housing market. For local residents, the competition from cash-ready foreign buyers can add another layer of challenge to an already expensive market. For international investors, however, the timing feels advantageous—less competition, better deals, and properties that continue to appreciate over time.
New Jersey’s role as both a global gateway and a desirable residential market ensures it will remain a top choice for foreign buyers, regardless of mortgage rates. The trend underscores how the state continues to be more than just a neighbor to New York City—it’s a destination of its own for international real estate.
