Though home prices are still slightly lower than what they were before the Great Recession, to foreign buyers, they're actually more expensive now than they have been in the last two decades.
With the strengthening U.S. dollar, some would argue foreign buyers will be dissuaded by exchange rates and we could see a decline in the U.S.'s housing market as a result. However, Jamie Anderson, a data scientist for Zillow, takes a deep dive into how the strong U.S. housing market will continue to attract these foreign buyers.
Logically, one might assume that as the dollar strengthens and foreign purchasing power wanes, foreign demand for U.S. real estate might also fall. But given the extreme recent volatility in global markets, and the relative stability of the U.S. housing market and U.S. economy overall, it’s actually possible that foreign demand for U.S. homes may pick up even as the dollar continues to gain strength.
The kind of Russian or Chinese buyer interested in purchasing U.S. homes, for example, is likely less sensitive to exchange rates than the more typical Russian or Chinese consumer. Rather than be dissuaded by exchange rates, they may be encouraged by U.S. housing’s stable return of about 3 percent per year – particularly if their domestic economies are contracting.