The primary drivers of foreign home buyers in the United States, in the near term, are expected to be economic and political factors in their countries of origin – and not necessarily the appeal of the United States’ domestic amenities.
Economic and political factors in origin countries – and not necessarily the appeal of the United States’ domestic amenities – are expected to be the primary drivers of foreign home buyers in the United States in the near term.
Respondents to the Q2 2017 Zillow Home Price Expectations Survey, a quarterly survey of more than 100 economists nationwide,[1] overwhelmingly pointed to origin-country factors as the main drivers of foreign home buying activity. A large majority (61 percent) of respondents ranked “financial/geopolitical uncertainty in the home countries of foreign buyers” as the first- or second-most important factor driving foreign investment. Slightly more than a third (37 percent) attributed the draw to low interest rates and high returns on investment in U.S. residential real estate.
U.S. immigration policies were viewed as the leading drivers by 28 percent of respondents, while roughly one in eight (12 percent) respondents cited educational opportunities in the United States as leading motivators. Only 7 percent cited proximity to U.S. recreation or leisure facilities.
Other Zillow research shows Chinese buyers of U.S. homes, in particular, tend to target a relatively high price point. And depending on the origin country, buyers of certain nationalities are more or less responsive to exchange rate movements.
[1] The Zillow Home Price Expectations Survey is sponsored by Zillow and administered by Pulsenomics.
