U.S. mortgage rates remain an important consideration for real estate investors in 2026, increasing borrowing costs and affecting potential returns. For foreign nationals looking to buy rental properties in the United States, this raises an important question: Is investing in U.S. real estate still worth it?
Despite higher financing costs, international buyers continue to invest in the U.S. residential real estate market. Recent data from the National Association of REALTORS® (NAR) and MIAMI REALTORS® highlights both the scale of international demand and the importance of markets such as South Florida to Latin American investors.
Meanwhile, Freddie Mac's national average 30-year fixed mortgage rate reached 7.40% on October 8, 2026. Although this benchmark does not represent the rates available for every investment property or foreign-national loan, it highlights the importance of evaluating borrowing costs against a property's potential rental income.
For international investors, the decision is not simply about waiting for rates to fall. It is about understanding current market conditions, assessing property-level returns, and identifying financing options that fit their investment strategy.
This article explores mortgage rate trends, the latest data on foreign homebuyers, and financing considerations for international investors evaluating U.S. real estate in 2026.
U.S. mortgage rates have fluctuated throughout 2026 as financial markets responded to inflation expectations, economic data, and movements in Treasury yields.
On October 8, the average 30-year fixed mortgage rate reached 7.40%, according to Freddie Mac. This national benchmark reflects conventional conforming mortgages and does not necessarily reflect the rates available for investment properties or loans designed for foreign nationals.
Higher rates affect real estate investors in several ways:
Mortgage rates also do not move directly in line with the Federal Reserve's benchmark interest rate. Long-term mortgage pricing is influenced by bond yields, inflation expectations, and lender-specific factors.
A rate forecast alone is not enough to determine whether a property is a good investment. Buyers should evaluate realistic loan terms and test whether the property meets their financial goals under different market scenarios.
Planning to invest in U.S. real estate? Visit Waltz to explore financing options designed for foreign investors and learn how to finance your next U.S. investment property.
The latest NAR report shows that foreign buyers purchased $45.3 billion worth of existing U.S. homes between April 2025 and March 2026, down from $56 billion in the previous reporting period.
Key findings from the 2025 and 2026 reports include:
Sources: NAR's 2025 and 2026 International Transactions in U.S. Residential Real Estate reports. Reporting periods: April 2024–March 2025 and April 2025–March 2026, respectively.
These findings show that international investment remains an important part of the U.S. housing market, even as purchasing activity changes. Mexico's growing share is particularly relevant to lenders and other businesses serving Latin American investors.
South Florida provides a closer look at international demand, particularly among Latin American buyers.
According to the 2025 international report from the MIAMI Association of REALTORS®, international buyers purchased approximately 5,300 residential properties in South Florida in 2025, representing $4.4 billion in sales, a 42% increase in dollar volume compared with 2024.Â
Latin American buyers accounted for a significant share of this activity, led by Colombia (15%), Argentina (12%), Mexico (7%), and Brazil (7%). These figures highlight Miami's continued importance as a destination for international real estate investment, even as higher borrowing costs influence purchasing decisions.
Higher mortgage rates can reduce cash flow and purchasing power, but they do not automatically make every investment property unattractive. Several factors continue to shape international investors' interest in U.S. real estate.
The U.S. offers a wide range of investment opportunities, from single-family rentals and condominiums to small multifamily properties.
Rental demand, prices, and operating costs vary by location. Investors can compare markets and look for properties that align with their budgets and return objectives.
Foreign investors whose wealth is held in another currency may value owning an asset denominated in U.S. dollars.
However, currency exposure introduces risk as well as potential diversification benefits. Exchange-rate movements can affect the cost of purchasing a property, the value of rental income when converted into another currency, and eventual sale proceeds.
Paying cash avoids mortgage interest, but it also commits a larger amount of capital to a single property.
Financing may allow eligible investors to retain some liquidity or distribute capital across multiple investments. This strategy involves additional costs and risk, and returns are not guaranteed.
The decision to finance should be based on the property's projected performance and the investor's overall financial position, not on leverage alone.
Waiting for mortgage rates to decline may seem appealing, but future rates are uncertain. Property prices, rental demand, insurance expenses, and available inventory can also change.
Investors can take a more disciplined approach by evaluating current loan terms, comparing properties, and testing projected returns under different scenarios.
If the investment only works under optimistic assumptions, it may not provide enough margin for unexpected expenses. If it meets the investor's criteria under conservative assumptions, the decision can be grounded in the property's fundamentals rather than a prediction about interest rates.
For international investors, evaluating a property's potential is only part of the equation. Understanding how to finance a purchase while managing borrowing costs and preserving capital is equally important. One option worth exploring is a Debt Service Coverage Ratio (DSCR) loan, which focuses on a property's qualifying rental income rather than relying exclusively on the borrower's personal income.
A debt-service coverage ratio (DSCR) loan is a type of real estate financing that evaluates a property's qualifying income relative to its debt service.
Rather than relying exclusively on a borrower's personal employment income, a DSCR program focuses on the property's ability to generate income to cover the loan's obligations.
For example, suppose a rental property generates $3,000 in qualifying monthly rental income and has $2,500 in qualifying monthly debt service.
The DSCR calculation would be: $3,000 Ă· $2,500 = 1.20
A DSCR of 1.20 means qualifying income is 1.2 times the debt service under that calculation. It does not guarantee positive cash flow after every operating expense, including taxes, insurance, maintenance, and vacancy.
Yes. Some U.S. lenders offer DSCR financing to eligible foreign nationals purchasing qualifying investment properties. Requirements vary by lender and loan program and may include minimum down payments, documentation, property restrictions, and other eligibility criteria.
For international investors without a U.S. credit history or traditional U.S. income documentation, a DSCR loan may offer an alternative to conventional financing. By focusing on a property's qualifying rental income relative to its debt obligations, this type of loan helps investors assess whether the property can support the proposed financing.
This approach may be particularly relevant when mortgage rates are high because borrowing costs can significantly affect projected returns. Investors should compare the property's qualifying rental income with its debt service while also accounting for other ownership expenses.
The NAR report found that 48% of foreign buyers paid entirely in cash during the latest reporting period. For investors considering financing instead, comparing interest rates, fees, down payment requirements, and projected rental income can help determine whether a DSCR loan makes financial sense.
Before purchasing a U.S. investment property, international buyers should assess the full cost of ownership and test whether the investment works under realistic assumptions.
1. Calculate the full cost of ownership. Include the purchase price, down payment, closing costs, mortgage payment, property taxes, insurance, maintenance, vacancy, and property management.
2. Compare financing scenarios. Evaluate different down payments and loan structures where available. Test how changes in interest rates or rental income could affect the investment.
3. Evaluate the property's rental fundamentals. Research comparable rents, local demand, vacancy, operating expenses, and the property's potential resale market.
4. Account for currency conversion. Consider exchange-rate spreads, wire fees, the cost of funding the down payment, and the impact of currency movements on returns.
5. Review loan terms carefully. Compare interest rates, APR where applicable, fixed versus adjustable rates, fees, repayment terms, and prepayment provisions.
6. Maintain adequate reserves. Rental properties can experience vacancies, repairs, and unexpected costs. Investors should consider whether they can cover these expenses without relying on uninterrupted rental income.
A property that meets an investor's criteria under conservative assumptions may be worth further consideration. One that depends on perfect occupancy, rising rents, or a future rate decline may carry more risk than expected.
Higher mortgage rates remain an important consideration for foreign nationals investing in U.S. real estate. They affect monthly payments, cash flow, and purchasing power, making careful property analysis essential.
At the same time, the latest NAR report shows that international buyers purchased $45.3 billion worth of existing U.S. homes between April 2025 and March 2026. In South Florida, international purchases totaled $4.4 billion in 2025, with buyers from Colombia, Argentina, Mexico, and Brazil accounting for substantial shares of foreign transactions.
Together, these figures show that international investors continue to participate in the U.S. residential market, although demand varies by country and region. For foreign buyers, the key question is not simply whether mortgage rates are high, but whether a particular property can support its financing costs and meet their investment objectives.
Comparing loan terms, projected rental income, operating expenses, and available capital can help investors make informed decisions in the current market.
Waltz helps eligible international investors explore financing for U.S. investment properties through a digital mortgage process designed for domestic and foreign buyers, with related services that support the broader investment journey.
Looking to finance a U.S. investment property from abroad? Explore your options with Waltz and learn how property-focused financing could fit your investment strategy.
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