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Published on July 18, 2024
Texas Holds Strong as Top Destination for International Homebuyers Amidst US Housing Market DownturnSource: Unsplash / Breno Assis

The allure of the Lone Star State continues to shine for foreign investors despite a national downturn in the overall U.S. housing market. Texas remains firmly seated as the second most desired location for international homebuyers, according to the latest report from the National Association of Realtors (NAR). However, the report indicates a significant pullback from international buyers in general, with the past year marking the lowest level of foreign involvement in the housing market since 2009.

Foreign investment has declined due to factors like high prices, a squeeze on supply, and a robust U.S. dollar which only heightens the financial barrier. Lawrence Yun, the NAR's Chief Economist, explained that "A stronger dollar makes US property more expensive [for foreign buyers]." His analysis suggests that now domestic buyers are somewhat better positioned to navigate the crowded market to find a home. Yun further noted the recent Texas legislation which sought to restrict real estate purchases by certain foreign nations, potentially playing a role in the investment dip. While drafting legislation to prohibit real estate purchases by governments and companies from countries including China and Russia, it had to later be stripped of parts objectionable to critics and eventually languished and expired in the committee phase.

Who's still investing in Texas, though? The statistics highlight the sustained interest from Mexican buyers who accounted for 42% and Indian nationals who made up 13% of the foreign purchases in Texas. However, the significant contributions from these and other top buyers, including those from China, added up to approximately $2.5 billion in the Texas economy, as per the NAR data.

Trends show that these purchases were largely single-family homes, with 76% being of this type, while 45% served as vacation properties or rentals. Properties on average ran high, at $780,300 - a record since 2009. But to possibly soften the blow for international buyers facing hurdles from credit to currency exchange, companies like Waltz are stepping in to provide a workaround. As CEO Yuval Golan highlighted the necessity "to wire money across two countries, that takes time," Waltz simplifies the process for international clients to smoothly navigate the U.S. residential property market.

Despite the introduction of new players like Waltz to facilitate foreign transactions, the US housing market has not seen a boost in international buys. As reported by CNBC, the NAR recorded a 36% drop in the number of existing homes purchased by international buyers in the year ending March 2024 compared to the previous. The dollar volume followed suit, with a 21% decline. With home prices soaring and political uncertainties linked to the upcoming presidential election likely to influence the market, it seems there might be little shift in the pattern of international investment in the US housing market in the near term.

Austin-Real Estate & Development