The original source of being buried in Israel is when Hashem promised the Land of Israel to the Jews and Hashem told Avraham Aveinu to buy the burial plot from Efron for 400 Zuz. All the forefathers Abraham, Isaac and Jacob , and the foremothers Sara, Rivka , Rachel and Leah were buried in the Cave of Machpeila in Hevron and this practice has continued until today that Jews have wished to be buried in the holy land of Israel.
Yaakov made his son Yosef swear that he would not bury him in Egypt and only in Israel forcing Pharaoh to allow him to bury his father in the Land of Israel. Moshe also brought up Yosef's bones in order to bury them in the land of Israel.
In the Gemara Ketubot 111a it says
Rav Anan said, “Anyone buried in the Land of Israel is considered as if he was buried beneath the altar; it is written here ‘An altar of earth (adamah) you shall make for me,’ and it is written there His land (admato) will atone for His people.’”
In the Jersualem Talmud Rabbi Elazar,“When they arrive in the Land of Israel, a clod of earth is placed in the coffin, as the Torah writes , ‘His land will atone for His people.
The Halacha is like Rav Elazar.
The Gemara in Ketubot 111a states that after the arrival of the Messiah and the resurrection of the dead, the first to be resurrected will be those that were buried in Israel. Those who are buried abroad will have to roll in underground tunnels until they will reach The Holy Land Of Israel. Chazal tell us that this will not be a pleasant experience.
The Ra'ava on the Passuk " And afterwards Avraham buried Sara" writes that is written to tell us the great benefit of Eretz Yisrael over all the lands for the living and the dead.
The Ramban writes in Parshat Vayishlach on the Passuk " And he purchased a portion of the field" in the name of the Rambam that anyone who has a portion in the Land of Israel is considered a like a portion in the World to Come.
In the Sefer Hayashar ( the 6th Perek) The Earlier Chasidim in Eretz Yisrael had a custom to buy a burial plot in the cemetery while they were alive from Kosher people and they would have the custom to pray there and would say Divrei Torah and give charity and in that way they would purify the burial plot and make it holy so that it would be ready to be buried there and because of the holiness created there the Sitra Achra would not come close to that area.
In the Sefer Hachaim part 2 Chapter 8 - Every person even a poor person should have a burial place bought with money ready and the reason is so that the destructive angel does not have permission to remove a person from his private domain and a private domain is only something that is purchased with money. This is why Avaraham Aveinu wanted to pay the full purchase price for the burial plot that he bought for Sara Imeinu.
Midrash Rabah- Vayikra 5:5 Aperson should have a nail or a fixed peg in a cemetery in order that he can merit and be buried in that place.
In the Sefer Maavor Yabok - page 208- It is a honour for a person to be buried in his burial plot and therefore the Custom is to buy a burial plot.
In the Sefer Gesher Hachiam- page 296- Many have the custom to buy a burial plot in their lifetime.
In the Sefer Teshuvos and Hanhagos of Hagaon Rav Moshe Shternbuch Shlita- Volume 1 - Siman 713 - To buy a burial plot- It is a good thing to buy a burial plot when one is alive and it is a Segula for a long life.
For these reasons many have chosen to be buried in the land of Israel.