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Key Takeaways for Foreign Nationals Investing in US Real Estate in 2026:
1. Investor sentiment is rising: 45% plan to deploy more in 2026, and only 17% plan to deploy less.
2. Institutions are underallocated: 63% are underweight to private real estate as of year end 2025, up from 59% at the start of last year and 38% in 2024.
3. Fundraising improved in 2025: Total private real estate fundraising was reported at $222.2B in 2025, up 29% from 2024, which signals more capital lining up behind future acquisitions.
2026 is opening with something foreign real estate investors love: clearer signals. Borrowing costs are still higher than the ultra-low-rate years, but inflation has cooled and the rate environment has been steadier. That makes it easier to price deals, plan financing, and avoid last-minute surprises during underwriting.
A key inflation gauge from the US Bureau of Labor Statistics, the Consumer Price Index (CPI), rose 2.7% over the 12 months ending December 2025. Long-term rate benchmarks have also been more stable, with the 10-year US Treasury yield at 4.24% on January 23, 2026. And the Federal Reserve’s policy rate target range was set at 3.5% to 3.75% effective December 11, 2025.
For foreign nationals buying US real estate, this is the kind of environment where a smart, repeatable investing strategy can beat perfect timing.
What “Under-allocated” Means in Real Estate [Simple Explanation]
Large institutions invest with portfolio targets. They decide what percentage of the overall portfolio should be in real estate. When performance lags, when allocations slow, or when other asset classes grow faster, real estate can end up below the target.
That gap is what underallocation means. They are underweight relative to the exposure they want.
The reason this matters is that when a large share of institutions sits below target, there is usually internal pressure to increase exposure over time. They do not all buy the same deals, but more capital tends to show up in the market, and that can change pricing and speed in specific segments.
To be clear, underallocation does not guarantee a price surge everywhere. It signals that the investor base has room to deploy more, especially if confidence improves.
Two Numbers that Quietly Shape your Mortgage Experience
Foreign nationals often hear “rates are up” or “rates are down,” but the loan process usually reacts to two signals more than headlines.
Inflation
Inflation is how fast prices rise across the economy. One of the main inflation measures in the US is the Consumer Price Index (CPI) published by the US Bureau of Labor Statistics. When inflation is cooling, lenders and markets often find it easier to price loans consistently.
As of December 2025, CPI rose 2.7% over the prior 12 months.
The 10-year US Treasury Yield
The 10-year US Treasury yield is a commonly watched benchmark for long-term interest rates. Mortgage pricing does not copy it exactly, but it influences the overall direction of borrowing costs.
On January 23, 2026, the 10-year Treasury yield was 4.24% based on the FRED DGS10 series.
The reason this matters is that steadier long-term rates usually mean fewer sudden pricing changes while you are in the middle of a purchase.
Where Competition Rises First When Big Investors Deploy More Capital
Institutions usually deploy into segments that are easier to scale and easier to explain in investment committees. That often includes stabilized rentals in liquid metros and property uses with simple operating profiles.
The most common question we get from foreign nationals at this point is, “Does this mean I will be competing with institutions?”
The answer is, not directly in every deal. Many institutional strategies focus on deal sizes and structures that look very different from what a foreign national buyer is purchasing. Where you can feel the impact is in the “clean, obvious” opportunities that everyone agrees are safe. Those can move faster when more capital is active.
How Foreign Nationals Can Stay Competitive in 2026
A pattern we’ve noticed is that foreign nationals do best when they focus on strategies that institutions cannot easily replicate. Not because the deals are complicated, but because they require local nuance or smaller deal sizes.
Here are three plays that tend to hold up well when competition rises.
1) Use cash flow as your filter, not appreciation headlines
Technically speaking, a higher-rate environment rewards deals where the rent supports the payment and operating costs. If a property only works when everything goes perfectly, it becomes fragile fast.
A cash-flow-first approach forces you to answer the right questions:
-
Does the rent realistically cover the mortgage and expenses? - Are taxes, insurance, and maintenance conservative in your model?
- If vacancy runs longer than expected, does the deal still survive?
One downside to consider is that operating costs can surprise foreign nationals more than pricing does, especially insurance and repairs. Your underwriting should build in breathing room.
2) Build a buy box that stays financeable and manageable from abroad
What most guides don’t mention is that “good investing” for a foreign national is not only about buying well. It is also about operating smoothly from outside the US.
A buy box is your personal set of rules for what kind of investment property you will buy.
It usually includes things like the location, property use (for example, long-term rental or small multifamily), price range, minimum cash flow or rental yield, and any “must-haves” such as a certain tenant demand or a property condition you are comfortable managing.
That usually means choosing properties where:
- long-term rental demand is durable
- property management is easy to hire
- maintenance is predictable
- and the plan is repeatable across multiple purchases
Investment Properties on Sale Today
3) Move faster by being prepared, not by rushing
In our experience, foreign nationals who win deals in tighter markets are not always the highest bidders. They are the ones who remove uncertainty for sellers.
That usually comes down to preparation:
- financing plan discussed early
- documents organized before the offer
- source of funds clear
- reserves ready
- and a realistic closing timeline
Speed is not about rushing into a deal. It is about avoiding preventable delays after you have already chosen the right deal.
Small Multifamily Explained (And Why It Can Be a Smart 2026 Play)
Smaller properties can be an advantage in a more competitive market because they often sit below the size where institutions focus most of their time.
Multifamily is a residential property with two or more separate housing units in one building (or on one lot), where each unit has its own kitchen and living space. Common examples include duplexes, triplexes, four-plexes, and apartment buildings.
Small multifamily can work especially well for foreign nationals who want cash flow, diversified rent streams, and a clearer path to stable occupancy.
HomeAbroad Financing Strategy for Foreign Nationals in 2026
Foreign nationals often assume their biggest challenge is qualifying. Here’s what actually happens: many investors can qualify, but deals fall apart because financing is not structured around the investment plan.
This is where HomeAbroad typically helps foreign nationals stay competitive:
- Foreign national mortgage options that do not require US credit history
- Long-term terms available
- Rental-focused qualification options using DSCR loan
- Mortgage officers with international expertise, so documentation and cross-border funds are handled cleanly
Steven Glick,
Director of Mortgage Sales, HomeAbroad
Bottom Line: A Simple 2026 Plan for Foreign Nationals
Our report is signaling two things at once: more investors plan to deploy additional capital this year, and a large share of institutions remain underallocated relative to targets. That combination is often a setup for higher activity.
For foreign nationals, the best response is not to panic or chase. It is to tighten your strategy:
- prioritize cash flow
- choose a manageable buy box
- prepare documentation early
- and structure financing around the way you want the property to perform
That’s how you stay ahead when the market gets busier.
FAQs
Why are more investors planning to deploy capital in 2026?
Our reporting suggests the combination of under allocation and improving confidence is pushing more investors to increase exposure.
What does “63% under allocated” mean in practical terms?
It means most institutions are underweight compared to their targets, which can create pressure to invest more in the coming cycle.
Does this affect foreign national investors directly?
Yes. More capital can raise competition in popular segments, especially stabilized rentals and institutional-favored sectors.
What is CPI
CPI stands for Consumer Price Index. It is one of the main inflation measures in the US and is published by the US Bureau of Labor Statistics. It tracks how prices change over time across a broad “basket” of goods and services.
What is the 10-year US Treasury yield?
It is the interest rate the US government pays to borrow money for 10 years. Investors watch it because it influences long-term borrowing conditions, including mortgage pricing trends. The FRED DGS10 series reported 4.24% on January 23, 2026.
