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Tribune News Service
Tribune News Service
Business
Mitchell Parton

Texas home buyers are competing against investors across the globe

Texas is an epicenter for foreign investment in the U.S. housing market.

International buyers bought $59 billion in U.S. residential properties from April 2021 to March 2022, up 8.5% from the previous year and breaking three consecutive years of declines, according to a new report from the National Association of Realtors.

Although overall dollar volume increased, rising home prices offset an annual decline in the number of homes sold to the international buyers throughout the country, which was still down 7.9%.

Foreign buyers bought 98,000 homes nationwide, the smallest number since NAR began tracking this in 2009. They made up 2.6% of the nation’s $2.3 trillion in existing home sales.

Texas was the third most popular destination for foreign buyers in the U.S., representing 8% of their purchases. The state was also the most popular destination for Mexican buyers, representing 22% of their transactions.

The largest share of foreign buyers in the Texas market came from Latin America and the Caribbean (31%), followed by Europe (27%), Asia and Oceania (16%) and Africa (11%).

Of all the foreign buyers in the U.S., 44% bought their properties as a vacation home, rental or both.

NAR’s chief economist Lawrence Yun said while he expects home sales to decline in the U.S. this year due to rising interest rates, that may not impact international buyers as much.

All-cash sales made up 44% of international transactions. That is almost twice the share of all-cash purchases in the overall preowned home market.

Foreign buyers “are likely to step up purchases, as those making all-cash offers will be immune from changes in interest rates,” Yun said in a statement. “In addition, international flights have increased in recent months with the lifting of pandemic-related travel restrictions.”

Nationally, Chinese buyers purchased the most by dollar volume, followed by Canadian buyers.

Recent immigrants and people holding visas allowing them to live in the U.S. represented $34.1 billion, 58%, of the foreign purchases studied by NAR. People with permanent addresses abroad bought $24.9 billion in homes, 42% of the dollar volume.

The median sale price among international buyers was $366,100, up 17.7% from the year prior. This in part reflects the increase in U.S. home prices. The national median home price rose 14.8% to $407,600 in May, according to NAR. Dallas-Fort Worth home prices rose 20% to $435,000 in June, according to the Texas Real Estate Research Center and North Texas Real Estate Information Systems.

“Affordability challenges along with the inability to find the right property were the top reasons given for prospective international buyers who showed interest but ultimately did not purchase a home in the United States,” Yun said.

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