• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Takeaway: A stronger dollar matters in the housing market because foreign demand makes up ~4% of total transaction volume and ~8% of dollar volume.

Editor's Note: Below is an excerpt from an institutional research note written last week by Hedgeye Housing analysts Josh Steiner and Christian Drake. To access our Housing team's institutional research email sales@hedgeye.com.

Housing: How A Stronger Dollar Is Influencing Foreign Buyers - Dollar cartoon 03.09.2015

According to the National Association of Realtors, International Homebuyers purchased $103bn of US real estate from April 2015 through March 2016. Five countries: China, Canada, India, The United Kingdom and Mexico accounted for 51% or $52.8bn. China was the largest buyer for the second year in a row, accounting for 27% or $27.5bn of all foreign home purchases during the survey period.

  • Foreign Buyer residential home purchases were up +3% YoY to 214,900 units
  • Foreign Buyer dollar volumes were down -1.3% YoY to $102.6B
  • Sales Volumes to non-resident foreigners fell -11% YoY to 88.5K
  • Dollar Volume of non-resident purchases fell -18.5% YoY to $44B
  • 50% of International Buyer residential home purchases were paid in all cash
  • Foreign Buyers paid on average 56% more for an Existing Home than Domestic Buyers

Strong Dollar Impact

The U.S. Dollar is up 23% since July 2014 and, while gains have been more muted over the 12 months, currency headwinds continue to pressure purchasing power across key demand countries.  

As shown in the chart below, the Strong Dollar has increased the Median Price of US Existing Homes in the local countries of the Top 5 countries anywhere from 10% to 22% YoY.

Housing: How A Stronger Dollar Is Influencing Foreign Buyers - housing josh

For more information on our institutional research email sales@hedgeye.com.