Both exports and imports rose in the latest month, marking general growth in international trade for five straight years. Home sales therefore can be expected to rise to international buyers from greater linkage with other countries.
Part of the growth is foreign investment in the U.S. More Germans will need a home in Greenville, SC, where a BMW factory will be expanding. Homebuyers from France can be expected in Mobile, AL in the future as an Airbus production facility gets completed. More Koreans will be buying homes in college towns across America as they send their kids to be educated in the U.S.
After a major pullback during the recent past recession, U.S. exports have risen by more than 50 percent. Exports hit a new all-time high in March.
Imports are also rising. But due to slower growth, imports are only matching up with pre-recession peaks. The United States is importing much less oil now than before because of massive new production in North Dakota.
Given that trade with China has become increasingly important, expect more Chinese buyers of U.S. properties than ever before.
As the charts below show, international trade slumps during a recession. There was a total collapse in international trade during the awful Great Depression in the 1930s as every country restricted trade by imposing high tariffs.
Before the birth of the United States, sovereign states Virginia and Maryland signed a treaty to openly trade between the two states. Tobacco to Maryland and Crabs to Virginia. That helped improve the economies of both states. Recognizing the benefits, other states soon signed on to trade with each other as well. This type of mutual benefit is the primary reason why most countries have been reducing trade barriers over the years.
Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.