Here’s why international buyers are pulling way back from the U.S. housing market

International buyers of U.S. residential real estate are running into the same hurdles as domestic buyers — namely high prices and tight supply — but they’re also up against a strong U.S. dollar, which makes the properties even more expensive for them. As a result, international buyers are pulling out.

They purchased 54,300 existing homes from April of last year to March of this year, a 36% drop from the year before, according to a new report from the National Association of Realtors. This is the lowest level of international investment since the NAR began tracking it in 2009.

The dollar volume, $42 billion, was also down 21% from the year before.

This comes as both the average ($780,300) and median ($475,000) purchase prices were the highest the NAR ever recorded for foreign buyers.

The top buyers by volume were from Canada, China, Mexico and India. Those buyers purchased the most properties in Florida, Texas, California and Arizona. Chinese buyers spent the most money, purchasing higher priced homes, according to the NAR.

The report only counts sales of existing homes, and foreign buyers are big in the new development space, which is not reflected in the data.

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

But foreign buyers also face additional hurdles.

“We don’t have a credit score, we have a weird name, we have a different passport,” said Yuval Golan, CEO of Waltz, a new company that aims to facilitate foreign purchases of U.S. residential real estate. “Then we need to wire money across two countries, that takes time. There’s additional foreign currency exchange that we need to deal with, a bunch of titles are things we don’t know, like a title company, and a mortgage broker and a lender that might not understand our history of credit and income.”

Golan said Waltz provides foreign investors with a simpler, remote experience to buy U.S. real estate in 30 days.

“We underwrite them in their home country, we help them to set up an LLC. Within seconds, we open for them a U.S. FDIC-insured bank account, we collect their money locally, and we’re able to do foreign currency exchanges within seconds,” Golan added.

Waltz is also acting as a mortgage lender, albeit at higher than market rates.

As it stands, international buyers make up just 1.3% of all U.S. home sales annually, according to the NAR, and half of international buyer sales were all-cash, compared with 28% of total existing-home sales.

More supply is coming onto the U.S. market, but it is still historically low, and prices remain stubbornly high.

And then there’s the upcoming presidential election. International buyers tend to pull back during times of political uncertainty. It is unlikely sales from foreign buyers will improve in the coming year unless several factors, both economic and political, improve.