The rising number of Chinese buying U.S. homes could be a boon for investors with a stake in U.S. residential mortgages.

This would include those who hold bonds that either bundle mortgages or mimic their performance, as risk-sharing deals from the GSEs do. 

Analysts at Bank of America Merrill Lynch drew this connection between Chinese demand and future mortgage performance in a securitization report this week. The idea is these buyers are increasingly contributing to rising prices, which tend to keep mortgage delinquencies at bay.

The analysts said that demand from China could add another 1.0 percent to their forecast for the growth in the Case Shiller National Home Price Index (HPI) for 2015 and 2016, currently at 3.7% and 1%, respectively. But fully incorporating foreign buyers into their projections represents a “modeling challenge,” they added.

Chinese buyers were behind 28% of real estate sales to foreigners in the 12 months through March 2015, according to the National Association of Realtors. And apparently about 70% of them are paying entirely in cash.

This appetite from abroad is more stable than in the past. That’s because before—in the lead up to the recent housing bust, for instance—China’s role in a bullish property market in the U.S. was expressed chiefly through the purchase of mortgage-backed securities, which can be a sold on a whim. Recent demand though has come from direct purchases of real estate. The BAML analysts believe a good proportion of these buyers are buying property as a way to anchor permanent residency status in the country.

The boom in EB-5 visas going to Chinese investors suggests this as well. This visa type is a way for an immigrant to secure a green card by investing a certain amount in the U.S., generally no less than $1 million for most areas.

The number and share of these visas snapped up by the Chinese have soared in the past few years as seen below.

There are probably both push-and-pull factors driving Chinese to buy U.S. property. Acting as magnets are rising interest rates and a stronger dollar vis a vis the yuan (as well as other global currencies). “Even though it becomes more expensive to buy U.S. real estate as the Chinese yuan further devalues, buying U.S. could still be deemed a good investment as long as the depreciation is expected to continue,” the analysts said. Last August, the People’s Bank of China effectively devalued the currency against the dollar by loosening its grip. Recent announcements by the authorities there indicate further depreciation is likely.

The BAML analysts also argued that the returns on U.S. property are probably perceived as more stable than those on Chinese assets. Wild swings in Chinese equities in the past year in particular could be convincing investors to look across the Pacific.

Interestingly, Case-Shiller’s national HPI started to outperform a comparable index for 70 Chinese cities in early 2012, right about the time Chinese inflows into U.S. properties started to pick up.

And Chinese interest in gaining a foothold here could have staying power with a built in source of future demand: the explosive growth in foreign Chinese student. The number of Chinese enrolled in the K-12 grades in the U.S. hit 34,578 in Nov. 2015, a 290% rise from five years ago.

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