TEXAS, USA — The housing market in Texas has grown in popularity among foreign investors and movers, especially those from Mexico, according to a new report from the National Association of Realtors (NAR).
Since 2009, the NAR has released an annual report to measure the volume of U.S. residential real estate transactions with international clients. These clients are broken down into two categories:
- Non-resident foreigners (Type A): Non-U.S. citizens with permanent residences outside the U.S.
- Resident foreigners (Type B): Non-U.S. citizens who are recent immigrants (less than two years at the time of the transaction) or non-immigrant visa holders who reside for more than six months in the U.S. for professional, educational, or other reasons.
Simply put: People from outside the country are both moving to Texas and buying homes as investments.
According to the NAR report, which looked at U.S. home purchases by people from other countries between April 2022 and March 2023, 51% of foreign buyers fall into the "resident foreigners" distinction.
Texas became significantly more popular among foreign buyers, increasing four percentage points from the 2022 report. In 2023, Florida remained the top destination with 23% of the purchases. Texas and California tied for the second most with 12%. This same share was 24%-11%-8% (Florida-California-Texas) in 2022.
A significant increase of foreign buyers for Texas homes came from Latin American and Caribbean countries, the report said. Fifty-five percent of Texas' foreign homebuyers came from this region, up significantly from 31% in 2022.
Where Texas' foreign homebuyers came from
2022:
- Latin America/Caribbean: 31%
- Europe: 27%
- Asia/Oceania: 16%
- Africa: 11%
- North America: 0%
- Region not identified: 15%
2023:
- Latin America/Caribbean: 55%
- Asia/Oceania: 25%
- Europe: 11%
- Africa: 5%
- North America: 4%
Texas is becoming a more popular option around the world
So, you just got a glimpse of where people are coming to Texas from. Now, let's look at how Texas compares to other states among the most common foreign buyers. The top foreign buyers, in order, are: China (13%), Mexico (11%), Canada (10%), India (7%) and Colombia (3%). Here is a look at how popular Texas has been for these homebuyers:
- China: Third-highest (8%), behind California (33%) and Florida (16%)
- Mexico: Highest (48%)
- Canada: Tied for third-highest (4%), behind Florida (55%) and Arizona (14%)
- India: Third-highest (11%), behind California (20%) and Pennsylvania (14%)
- Colombia: Not listed in report
In the 2022 report, Texas was not in the top 15 destinations for China and was No. 7 for homebuyers from India. Texas was not on Canada's major destinations list for 2022, either. Popularity from Mexican homebuyers grew tremendously, up from 22% in 2022 to the 48% mentioned above for 2023.
Intended use of the property
According to the 2023 NAR report, 50% of foreign buyers nationwide purchased the property for use as a vacation home, rental property, or both, a six-percentage point increase from the previous year. Nationally, homes purchased for vacation or rental use accounted for 16% of existing-home sales. The report says the rise of remote work and rent growth has increased the attractiveness of a home purchase for vacation or rental use.
Here is a breakdown of how the major foreign buyers intend to use the homes purchased:
- China: 38% vacation and rental, 30% primary residence, 13% vacation home only, 11% residential rental, 8% student use, 2% other
- Mexico: 53% primary residence, 20% residential rental, 10% vacation home only, 8% vacation and rental, 4% other, 4% don't know, 2% student use
- Canada: 49% vacation home only, 29% primary residence, 11% vacation and rental, 7% residential rental, 4% don't know
- India: 65% primary residence, 19% residential rental, 10% other, 6% don't know
- Colombia: 47% residential rental, 13% primary residence, 13% vacation and rental, 13% student use, 13% don't know
For a look at the full report, click here.
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