Let's start off with a quote from Robert Prechter's book, Conquer the Crash:
The psychological aspect of deflation and depression cannot be overstated.
The deflationary mindset involves a loss of confidence in the future among consumers, as well as other participants in the financial system.
With that in mind, the number of overseas buyers of U.S. homes has been shrinking by a significant percentage, "implying less confidence in owning a property in the U.S.," according to the chief economist for the National Association of Realtors.
The quote is from a July 17 CNBC article titled, "Foreign purchases of American homes plunge 36% as Chinese buyers flee the market." Here's an excerpt:
Challenging conditions in the U.S. housing market, along with tighter currency controls by the Chinese government, caused a stunning drop in foreign demand for American homes.
The dollar volume of homes purchased by foreign buyers from April 2018 through March 2019 dropped 36% from the previous year, according to the National Association of Realtors. The decline was due to a drop in the number and average price of purchases. Foreigners bought 183,100 properties with a total value of about $77.9 billion, down from 266,800 valued at $121 billion in the previous period.
They paid a median price of $280,600, which is higher than the median for all existing homebuyers ($259,600), but it was down from $290,400 the previous year.
"A confluence of many factors -- slower economic growth abroad, tighter capital controls in China, a stronger U.S. dollar and a low inventory of homes for sale -- contributed to the pullback of foreign buyers," said Lawrence Yun, NAR's chief economist. "However, the magnitude of the decline is quite striking..."
You can read the entire article by following the link below: