Residential real estate in Mexico – statistics & facts
Buying a house in Mexico - the Latin American country with the second largest economy - is a considerable investment. In 2023, the average house price stood at approximately 1.6 million Mexican pesos. That was nearly seven times the average annual income in Mexico City, the federal entity with the highest monthly salary in the country.
Mortgage interest rates also play an important role in housing affordability. In Mexico, the average interest rate on mortgages offered by the leading bank lenders ranged between nine and 12 percent in 2023. That was significantly higher than the interest rates in many countries with advanced mortgage markets globally.
Renting can also be attractive because of affordability. Over the last decade, house prices have grown 57 percent faster than rents. Looking ahead, a declining supply of new housing units is expected to continue to drive up prices.
Home financing in Mexico
Commercial banks or other non-bank financial institutions that offer lending, such as Sofomes, are responsible for only a small share of mortgage loans. Instead, the most popular mortgage lender is Infonavit, a government agency providing housing loans to workers. The scheme funding comes from mandatory contributions from employers that workers can use to apply for different types of loans. In 2023, approximately two-thirds of mortgage loans were Infonavit mortgages. Despite the popularity of home financing products, the number of mortgages granted in Mexico has declined in the past decade. In 2023, Mexican homebuyers took out 455,000 mortgages, about 150,000 loans fewer than in 2014 when the trend began. The reasons for this slowdown are complex, including growing construction costs and their effect on house prices.Mortgage interest rates also play an important role in housing affordability. In Mexico, the average interest rate on mortgages offered by the leading bank lenders ranged between nine and 12 percent in 2023. That was significantly higher than the interest rates in many countries with advanced mortgage markets globally.
Rental market
Although house ownership is the most common form of housing tenure, some states have a flourishing rental market. In Quintana Roo, Jalisco, Baja California, Colima, and Mexico City, more than 20 percent of households occupied a rental accommodation. These areas are established tourist destinations and offer substantial economic opportunities. Domestic and international immigration makes them attractive investment destinations. In Mexico City, the gross yield of a rental apartment in 2024 was almost 5.9 percent.Renting can also be attractive because of affordability. Over the last decade, house prices have grown 57 percent faster than rents. Looking ahead, a declining supply of new housing units is expected to continue to drive up prices.
