A recent Corelogic report found that foreign buyers are pulling back from the U.S. housing market, but this trend doesn't seem to be influencing Texas markets.
CoreLogic's Chief Economist Frank Nothaft found that in relation to the first few months of last year, home sales jumped 9 percent with the help of lower fixed mortgage rates by one-half percentage point, but foreign buyers did not help with this increase.
The lack of foreign homebuyers is mostly due to the strengthening U.S. dollar against currencies used by many foreigners who buy homes in the U.S, Nothaft said.
He added, "Between the first four months of 2014 and the same four months of 2015, the number of homes sold to foreign buyers drastically declined. Foreign purchases were down between one-quarter to one-third during this period for buyers whose currencies depreciated significantly relative to the U.S. dollar, even though domestic purchases rose.”
International homebuyers purchased 4 percent of all U.S. home sales and accounted for 8 percent of total U.S. home sales dollar volume between April 2014 and March 2015. The home sales number decreased 10.15 percent during this period, but international home sales dollar volume rose 11.4 percent.
The Texas Realtors also found that approximately 8 percent of home sales and $8.32 billion worth of this activity occurred in Texas, a 4 percent decrease from the same time frame last year. Texas is ranked third in the U.S. for total number of international home sales by state, while Florida (21 percent) and California (16 percent) hold the top two spots.
“With more international homebuyers in Texas now originating from China, Europe, and Africa than Latin America and Mexico, Texas truly has a global reputation as a great place to live, work, and raise a family,” said Scott Kesner, chairman of the Texas Association of Realtors. “International homebuyers see Texas real estate as a strong investment, whether that be as an investment property, a vacation home, or a primary residence.”
Source: Texas Association of Realtors
Nothaft also noted that in a National Association of Realtors (NAR) report, the number of U.S. homebuyers who identified as international dropped to 2 percent during the first four months of 2015 from 2.5 percent a year earlier. This equaled a 19 percent decline. Approximately three-fourths of real estate agents who work with international clients said that foreign exchange rate changes have a moderate to very significant effect on foreign homebuying.
According to the Texas International Homebuyers Report, for the first time, homebuyers from Latin America (including Mexico) did not occupy the majority of international homebuyers in Texas, making up only 41 percent of this group. Homebuyers from Asia/Oceania (including China) nearly doubled their share of 18 percent from April 2013-March 2014 to 31 percent from April 2014 to March 2015.
Texas homebuying activity among European and African buyers doubled during the same time, rising from 9 percent to 15 percent and 4 percent to 8 percent from April 2014 to March 2015, respectively. Meanwhile, at the same time, Texas home sales from Canadian homebuyers decreased slightly from 5 percent to 4 percent.
“The increasing diversity of homebuyers in Texas reinforces the importance for buyers to have a trusted advisor on their side to help them navigate the homebuying process," Chairman Kesner said. "Texas Realtors with a Certified International Property Specialist (CIPS) designation are specifically trained to understand the unique language, qualification, and financing challenges international homebuyers sometimes face and can be instrumental in de-stressing the homebuying process for these families.”
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However, the Texas Association of Realtors released their 2015 Texas International Homebuyers Report Wednesday, finding that international buyers have moved into Texas markets and have contributed $8.32 billion to the Texas economy between April 2014 and March 2015.
