Portugal vs US Real Estate: Compare Prices, Markets and Buying Process

Portugal and the United States are two very different real estate markets, but both are drawing strong interest from buyers around the world.

Portugal has become a hotspot for expats and lifestyle buyers thanks to its relaxed pace, high quality of life, and relatively affordable cost of property, especially when compared to US cities. The US, while generally more expensive, offers a larger market, with different opportunities and risks for investors to consider.

In this article, we’ll explore Portugal vs US real estate in detail. We’ll uncover how the two countries stack up when it comes to property prices, market dynamics, the home buying process, financing, and investment outlook to help inform your decision.

The Appeal of Portugal's Real Estate Market

We’ll kick things off with Portugal, a country that has quickly risen through the ranks of the global property scene and is now recognized as both a dream destination and a smart investment choice for international buyers.

Why Portugal Attracts International Buyers

Portugal has become a magnet for international property buyers thanks to its exceptional quality of life, which continues to drive real estate demand and strengthen investment potential.

The country also consistently ranks among the safest in the world, securing the seventh position in the 2025 Global Peace Index.

Beyond its appealing lifestyle, Portugal offers attractive residency pathways that make it easier to immigrate to compared to the USA.  Options like the D7 Visa for passive income earners, D8 Visa for digital nomads, D2 Visa for entrepreneurs, and the Portugal Golden Visa for investors, among others, help many expats from all walks of life qualify for residency.

Additionally, the Portuguese real estate market has demonstrated remarkable historical growth and stability, with property values more than doubling over the last decade.

Portugal vs US Real Estate Market Trends Compared

Apart from the excellent quality of life in Portugal, there are other factors influencing Portugal’s real estate market, such as the dynamics of demand compared to supply, current and anticipated performance, and other key factors like government policies and interest rates. 

Similarly, when considering buying property in US vs Portugal, the same factors will influence the larger US real estate market, but in different ways. 

The US market, particularly in large urban cities, is significantly more expensive than Portugal, which impacts demand. Additionally, the general cost of living in United States is almost double that of Portugal’s, according to latest data from Numbeo, increasing the appeal of the Portuguese property market.

Supply and demand dynamics

Portugal’s real estate market has seen strong demand in recent years, especially in popular areas like Lisbon, Porto, and the Algarve. Limited housing supply in these locations, combined with growing interest from international buyers, has driven up home prices.

The boost of tourism and the rise of digital nomads have also added pressure to the market. While new construction is on the rise, it hasn’t fully allowed demand to meet supply yet. 

These trends have sparked ongoing discussions around a potential national housing crisis, prompting the government to introduce measures aimed at increasing affordability and improving availability. That said, with demand outstripping supply in major cities, you should be able to secure a strong return on your investment for both short and long-term rentals, provided you buy in a suitable area.

The US real estate market presents a different picture. In general, demand for property is lower than supply as prices soar, and buyers are becoming more cautious with their spending.

Interest rates and inflation continue to play a significant role, influencing both buyer activity and housing construction. High mortgage rates and oversupply have also cooled some previously hot markets, leading to more cautious investment activity. 

Recent market performance and forecasts

Portugal’s real estate market has delivered strong growth in recent years, with market growth at about 15.8 percent year-on-year as of March 2025, outperforming the EU, UK, and USA significantly. Portugal’s property market is predicted to grow at over double the rate of these countries until 2027.

In the short term, annual growth of 5-6 percent is forecast for 2025. However, property hotspots within Portugal are already beating these predictions. In the first quarter of 2025 alone, Lisbon’s property market experienced growth of 5.9 percent, the sharpest increase it has seen in the past eight years.

Looking to recent trends in the US property market, demand has declined in many areas after the major post-pandemic price surge and is further hurt by ever-increasing interest rates. Forecasts expect a market growth of only three percent in 2025. Some cities have seen price drops or stagnation, while others, like Dallas, Fort Worth, and Florida, remain active and resilient. 

Looking ahead, national growth is expected to remain moderate, with a lot depending on local job markets and mortgage rate trends. However, given the current economic and political volatility, a lot of uncertainty remains.  

Return on investment (ROI) and rental yields

Property investors will be happy to know that ROI in Portugal vs United States is quite similar, although the US market generally comes out ahead when comparing areas with the highest rental yields. 

However, given the higher property prices, variable market, and interest rates in the US vs Portugal, the latter might provide an easier entry into property investment and more stable growth and returns over the long run.

Let’s a closer look at the average rental yields in Portugal per region:

In contrast, the US averages around 6.7 percent in gross rental yields, but it varies widely by city. 

Here are some of the average yields per region in the US:

Key influencing factors on the real estate markets

Apart from the potential ROI and quality of life in Portugal vs USA, these are some other factors to consider when making investment decisions:

• Interest rates: In Portugal, mortgage rates are influenced by European Central Bank (ECB) policy, which has kept rates relatively stable in recent years. In the US, the Federal Reserve’s interest rate hikes have made borrowing more expensive.
• Foreign investment: Portugal attracts expats and international buyers, even after the real estate investment option for the Portugal Golden Visa program ended. In some areas in the Algarve, foreign investment accounts for more than half of property sales. In the US, foreign investment is more concentrated in major cities but plays a smaller overall role in the national market.
• Government policies: Portugal has introduced housing laws in recent years aimed at improving affordability and regulating rentals, particularly short-term tourist rentals. In the US, local zoning laws, property taxes, and housing programs have a strong impact on supply and demand.
• Economic outlook: Both countries are influenced by broader economic conditions. Portugal has seen steady GDP growth, low unemployment rates, and controlled inflation. The US economy remains strong but faces uncertainty around inflation, government policies, and interest rates.

Portugal vs USA: Home Prices and Affordability

Now that we have explored each market and its influences, let’s compare housing prices, the rental market, and other living costs in the US vs Portugal.

Portugal vs US: Property prices comparison

The average prices per square meter in the various regions of Portugal are:

The average prices per square meter in the various regions of the USA are:

For the most part, housing prices in Portugal are significantly lower than in the United States. When you combine this with the country’s lower cost of living (including lower transportation costs), high quality of life, top-tier private and international schools with affordable tuition fees, and attractive rental returns, it’s easy to see why many buyers choose Portugal over the US for real estate investments.

Rental market comparison

Although rent prices will vary per region too, you’ll find the average rent in Portugal vs United States, according to Numbeo, compared below:

Once again, rental housing prices are significantly cheaper in Portugal compared to the US. The lower housing costs play an important role in keeping overall living expenses low in Portugal, especially when compared to the US and other Western European countries.

Overall cost of living and its impact on housing

Portugal’s overall lower cost of living makes its real estate market, even in the most expensive areas, feel fairly affordable compared to the US, even as real estate prices rise. According to Numbeo, the cost of living in the United States, including rent, is 49.4 percent higher than in Portugal.

Day-to-day and monthly expenses like grocery prices, healthcare and private health insurance, utility costs, and transportation are generally cheaper than in the US, helping buyers stretch their budgets further. This adds to the appeal of owning property in Portugal, especially for retirees, families, and remote workers.

The Real Estate Buying Process: Portugal vs USA

Buying property in Portugal and the United States can look quite different, especially when it comes to how properties are listed and how agents operate. Understanding the structure of each market can help buyers avoid common pitfalls and make better decisions. Below, we explore key differences in how the process works in each country.

Key differences in market structure and agent roles

Unlike the US, Portugal does not have a centralized Multiple Listing Service (MLS), a comprehensive and regularly updated database of available properties, like a Zillow Portugal, for example. 

Instead, listings are scattered across websites, agencies, and private networks. That’s why working with a well-connected property agent is essential for finding the best opportunities, including off-market gems. 

In Portugal, real estate agents often represent both the buyer and seller, so it’s important to have independent guidance from a buyer’s agent to find you the best deal and protect your interests.

In the US, the real estate process is highly centralized and structured. Most buyers work with their own agent while the seller has a separate one, ensuring clear representation on both sides. Agents rely on the MLS to find the right home quickly and efficiently.

Step-by-step buying process in US vs Portugal

The process of buying property in Portugal compared to the US differs slightly. Compare each step below to get an idea of the buying process should you choose to invest in either market.

Legal and financial considerations

Hiring an independent real estate lawyer in Portugal is essential to ensure due diligence is done correctly and to help you avoid costly pitfalls. There’s no title insurance, so your legal counsel must thoroughly check property ownership rights, debts, and land registry records. 

You will also need a Portuguese tax number (NIF), which must be secured through a fiscal representative if you are a foreigner. Having a local Portuguese bank account is highly recommended to reduce transaction costs.

In the US, the process includes:

• Title insurance (protects homeowners from financial loss due to defects in the title of a property, such as unpaid property taxes or even fraud)
• Escrow accounts (a financial arrangement where a neutral third party holds funds or documents until specific conditions are met)
• Standard disclosure requirements that help protect buyers. 

You will also need to consider and compare the following associated costs with buying a property in each country: `

Financing Real Estate: Mortgages in Portugal vs USA

No matter where you decide to buy property, the most important factor of your purchase is to decide how to finance it. Getting a mortgage works differently in Portugal and the US in terms of structure, interest rates, eligibility and down payments.

Mortgage rates and loan types

In the US, fixed-rate mortgages are the most common option, offering stable monthly payments over the life of the loan. However, these rates have recently exceeded 7 percent, making borrowing significantly more expensive than in previous years.

In Portugal, borrowers typically choose between variable and mixed-rate mortgages, although fixed-rate mortgages are also available. Mixed-rate products, which start with a fixed term before switching to a variable rate, have become increasingly popular.

Currently, Portuguese mortgage rates generally range from 2.5 to 4 percent, making financing more accessible compared to current US rates.

Eligibility and requirements

While both countries assess income and debt levels when deciding on eligibility for a mortgage loan, their approaches differ.

In the US, approval is often automated and based on criteria such as credit score, gross income, and debt-to-income (DTI) ratio. The ideal DTI is around 36 percent, though up to 43 percent may still be accepted.

In Portugal, lenders typically take a more individualized approach. Banks assess net income and financial stability, with acceptable DTI ratios ranging from 35 to 40 percent.

There are also practical age limits, with most banks requiring mortgages to be repaid by age 70 to 80. Expats are generally able to get mortgages easily in Portugal, but working with an experienced mortgage broker is advisable.

Loan-to-value (LTV) ratios for foreigners

In Portugal, non-resident buyers can usually secure mortgages covering 60 to 80 percent of the property’s value, requiring a 20 to 40 percent down payment.

In the US, down payments are marginally lower and can range from 5 to 20 percent, depending on the type of loan and borrower profile. A 20 percent down payment is common to avoid additional costs like private mortgage insurance.

Investment Potential: Which Market is Right for You

As with most investments, deciding on the right property market to invest in will depend on your needs and goals.

Portugal offers strong long-term potential thanks to steady demand from expats, a thriving tourism industry, and continued investment in infrastructure. Key cities like Lisbon, Porto, and parts of the Algarve have seen consistent growth and have produced high returns on investment, especially in recent years.

In the US, investment value is often driven by local job markets, population growth, and economic performance, especially in fast-growing cities like Austin and Miami.

That said, both markets come with risks. In Portugal, future housing policies and reliance on foreign buyers could impact growth. However, foreign demand will continue alongside tourism growth, benefitting rental yields.

In the US, rising interest rates, economic fluctuations, and regional oversupply of housing are key concerns for the future of the market.

Making Your Decision: A Portugal Buyers Agent Can Help

Now that you have all the tools and information you need to make an informed decision, all that’s left to do I take your first step towards your dream property investment or new home.

Before buying real estate abroad, it’s important to weigh your lifestyle goals, investment plans, budget, and how hands-on you want to be with managing the property.

Local rules, taxes, and market conditions can vary widely, so having the right guidance is key. If you are interested in finding out more about purchasing property in Portugal, our expert team at Goldcrest can help.

As an experienced buyer’s agent in Portugal, we offer deep local knowledge, help you navigate every step of the buying process, and connect you with trusted professionals to ensure a smooth and secure property purchase.

Chat with us to find out how we can help.