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More U.S. Buyers Looking for Second Homes Abroad

Report: Top picks are in Latin America

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The resort city of Cabo San Lucas in the Mexican state of Baja California Sur is a major destination for tourists and second-home buyers.

Cultura RM Exclusive/InStock/Getty Images
The resort city of Cabo San Lucas in the Mexican state of Baja California Sur is a major destination for tourists and second-home buyers.
Cultura RM Exclusive/InStock/Getty Images

Many more U.S. homeowners are interested in buying property abroad, and Mexico tops their wish lists, according to a survey released Wednesday by the National Association of Realtors.

Approximately 14% of real estate agents responding to NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate reported that during the year ending in March 2016, they had a client seeking to purchase a home in another country. The share more than doubles the 6% recorded in the previous 12-month period, as a strong dollar gives Americans more purchasing power.

Lawrence Yun, NAR’s chief economist, attributes the uptick partly to baby boomers nearing retirement age, who will be more interested in a second destination. Other reasons include job relocation, as increased U.S. foreign trade activity forces many employees to look for temporary homes.

MORE:Foreign Buyers Face Familiar Restrictions in Mexico

Latin America garnered the most interest from would-be buyers, including countries such as Mexico, with 13% of inquiries; Costa Rica and Colombia, with 4% each; and Brazil, with 3%. Other top picks according to NAR were the Philippines, Canada, Spain, Thailand, and Italy.

The list coincides with some of the weakest world currencies against the U.S. dollar, making properties in those countries more affordable to U.S. buyers. The Mexican peso, for example, has depreciated 16% versus the greenback in the last year and the Brazilian real has fallen 18%, according to data from NAR.

While there is no official data on where exactly in Mexico — or other countries — U.S. citizens are looking to buy, anecdotal evidence suggests that they are keen on beach properties such as those available in Mexico and Costa Rica, said Mr. Yun.

“Oceanfront properties (abroad) are more affordable than in the U.S.,” he said.

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As far as the interest in Colombia and the Philippines, Mr. Yun believes it is being driven by large immigrant populations from both nations looking to own a home in their country of origin.

This, however, doesn’t mean U.S. residents are looking to pack up and leave the country. Of those considering a purchase abroad, 87% wish to buy a vacation home or a residential rental unit, while only 9% seek a new primary residence.

NAR’s report -- based on a survey of some 6,000 agents -- also looked at sales of U.S. residential properties to foreign buyers, which went down slightly from last year to $102.6 billion. China led the ranking for the second year in the row, with 29,195 properties worth a total $27.3 billion. Completing the top five source countries of foreign buyers were Canada, India, the U.K. and Mexico.

Source: National Association of Realtors