A boost to the real estate market and its exchange traded funds (ETFs) might be coming from a place we wouldn’t have necessarily expected: overseas. Increasingly, foreign buyers are turning to the U.S. for second homes for any number of reasons, whether it’s for work, play or just an investment.
Leslie Wines of the Associated Press reports that while it’s hardly a new trend, it’s one that’s been picking up steam lately. One in five American realtors has sold a home to a foreign investor in the last year.
One of the obvious reasons for this trend is our troubled real estate market and the drop in housing prices. Meanwhile, many foreign markets – particularly in Europe – have seen a jump in home prices. All that, combined with the decline of the dollar, has led to a market here that’s affordable for overseas buyers.
If the trend gathers steam, some ETFs could see the benefits:
- iShares Dow Jones U.S. Home Construction (ITB)
- SPDR S&P Homebuilders (XHB)
- First Trust S&P REIT (FRI)
- streetTRACKS Wilshire REIT (RWR)
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.