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Though a tiny portion of the U.S. market, foreign buyers are purchasing homes here, according to a new report from the National Association of Realtors.

People who live in another country invested $41 billion in residential property in the U.S., representing 4% of the $907 billion overall market in the 12 months ending March 2010, according to the report, based on a survey of Realtors.

If you add in people who are recent immigrants or temporary visa holders, the total rises to $66 billion, or 7% of the residential market, according to the report. Read the full NAR report on Realtor.org.

The survey found foreigners buying property in 39 states, but a bit more than half were in four states: Arizona, California, Florida and Texas.

The buyers came from 53 countries, but the largest number was from Canada, at 23%. Mexico sent 10% of purchasers; the United Kingdom, 9%; China (including Hong Kong), 8%; Germany combined with France, 7%; and India, 5%, according to the NAR survey.

Not all foreign buyers get what they came for: 34% of potential buyers couldn’t complete the transaction because of financing problems. In some cases, banks were reluctant to lend to people who don’t have Social Security numbers.

Of those who did buy a home, 55% paid cash. In contrast, 92% of U.S. buyers financed their home with a mortgage in 2009.

The money being spent represents a tiny portion of the overall market, but nonetheless helps to put a dent in the nation’s excess supply of housing, according to economist Thomas Lawler. MarketWatch has an audio report you can hear about the survey.

And don’t miss Lew Sichelman’s Realty Q&A to find out why some condo owners are finding it impossible to sell to buyers who need FHA loans, thanks to some new government rules.

– Andrea Coombes, Personal Finance editor

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