Brexit may have given a lift to the U.S. housing market by putting downward pressure on mortgage rates. But a study conducted on behalf of Inman suggests it’s also had a cooling effect on international interest in U.S. real estate, particularly from two of the largest sources of foreign demand: Britain and Germany.

  • Annual growth in listing views by British and German users dropped sharply in July, the month after Brexit. And the trend persisted through August.
  • The softened demand will mostly impact U.S. luxury markets and second-home hubs.

Brexit may have given a lift to the U.S. housing market by putting downward pressure on mortgage rates.

But a study conducted on behalf of Inman suggests it’s also had a cooling effect on international interest in U.S. real estate, particularly from two of the largest sources of foreign demand: Britain and Germany. listing views from Britain posted the largest drop in annual traffic growth in July, the month after Brexit. Brazil and Germany were the only other two countries that registered significant decreases that month.

Since a disproportionate amount of international traffic to comes from wealthy foreigners, the traffic change portends a headwind that would mainly impact U.S. luxury markets, particularly those that are most popular with European buyers, according to Javier Vivas, manager of economic research at

The primary reason for the decrease in interest from U.K. residents is that Brexit made U.S. homes more expensive by driving up the value of the dollar against the pound, Vivas said.



What caused this currency effect?

Spooked investors pulled their money out of pound-denominated assets to buy up dollar-denominated assets, like U.S. Treasuries and mortgage-backed securities (MBSs), increasing demand for dollars to the detriment of demand for pounds, thereby increasing the value of the dollar against the pound, according to economists.

Post-Brexit changes in the U.K. economy also likely shook confidence or impacted the value of other assets that at least temporarily postponed plans for investing in U.S. real estate, said chief economist Jonathan Smoke.

Accelerating demand slowed by Brexit vote

Foreign purchases of U.S. homes declined by double digits in both 2014 and 2015, but demand from abroad has been increasing in 2016, according to a analysis of data from the National Association Realtors (NAR).

Brexit has stalled that growth, Smoke said. Looking across the eight largest foreign sources of demand, international listing views increased in July — the month after Brexit — from a year earlier. But seven of the eight top countries showed a slowing of traffic growth compared to June and earlier months in 2016.

The UK and Germany showed the most deceleration. In July, listing views from U.K. and German users increased one and 10 percent respectively from a year earlier, down from 17 and 27 percent in June.

This coincided with a decrease in the value of one pound from $1.55 the day of the Brexit vote, June 23, to an average of $1.31 in July, down 15 percent from a year ago, Vivas said. That effectively raised the purchase price of a million dollar U.S. listing by £118,000 GBP, or 18 percent for a U.K. buyer, according to Vivas.

“The observed relative decline in traffic and engagement is likely a reflection of the luxury tier moving slightly more out of reach for U.K. buyers,” Vivas said.

The Brexit effect shown by data has softened demand mostly in luxury and second-home hubs, since those are the most popular markets for British and German users, Vivas said.

Los Angeles; New York City; Orlando, Florida; Miami and Tampa, Florida; top the list, according to Vivas.

Another impact of Brexit’s boost to the dollar — which builds on two years of appreciation against foreign currencies — might be to induce more foreigners to sell U.S. properties.

Smoke added: “What we’ve seen as a result of the strong dollar is not just weakness in foreign buyers, but also foreign owners becoming sellers because of the significant gains they could lock in as a result of both asset price appreciation as well as the rise of the dollar.”

Miami exemplifies this trend, as one of the few major markets where property listings actually grew year over year, he said.

Email Teke Wiggin.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription