Residential real estate markets brace for major change
Posted on Wednesday, July 13, 2016 at 5:52:40 PM
The residential real estate market in the United States has fought back from some of the more concerning performances in history that arose in the wake of the recession, but it appears as though it is not quite out of the woods yet. In addition to some of the more important demographics of home buyers struggling to find financing or afford down payments on new houses, the international economy has begun to rear its ugly head in this arena as well.
Remember that the American economy is indeed moving along on a healthy tick, but that turbulence elsewhere can quickly translate to major issues domestically. Whereas international buyers of American real estate were helping to propel the industry in the past, it looks as though this otherwise powerful and positive trend might be nearing its proverbial ending.
The Wall Street Journal recently reported that while foreign purchases of U.S. real estate reached extremely high levels in the past few years, March saw a year-over-year decrease of $10 billion in this category. To put that into perspective, individuals who are citizens of countries other than the United States spent about $54 billion between March 2014 and the same month in 2015, but $44 billion in the 12 months leading up to March 2016.
Citing a study from the National Association of Realtors, the source pointed out that this is the lowest overall sum of spending from international buyers in roughly three years. At the peak of this trend, the market share for purchasers outside of the country was at about 50 percent, but this fell to 41 percent in the latest study period. According to the news provider, many believe that the much stronger American dollar is one of the reasons behind such a massive and immediate drop in spending from some of the nations that were investing so much in the past.
What this means for Americans
On one hand, fewer individuals vying for property can lead to a more challenging experience when trying to sell a home, but this might also benefit those who are looking to purchase a new property. Considering the fact that mortgage rates are down and residential financing programs are still diversifying, now might be a great time to apply for a loan and purchase a new home.