The Rising Cost of Housing and Its Impact on Young Buyers
Over the generations, owning a home has become increasingly challenging. While having a place of their own still symbolizes financial stability, the economic reality has distanced young adults from achieving this goal.
The high costs of real estate, the rising cost of credit, the increase in land prices, and average salary levels have created an environment where acquiring a home is a significant challenge.
New Home Prices and Young Buyers’ Affordability
According to the Federal Housing Society, by the end of 2024, the average price for a new home in Mexico was 1.7 million pesos, with an annual growth rate of 9.2%.
A young person with a monthly income between 15,000 and 18,000 pesos, as reported by the National Financial Health Survey (ENSAFI) 2023, would need around 30 years to save enough and purchase a home of that value without financing, even if they allocate 30% of their income exclusively to this goal, according to a calculation by the proptech Tuhabi.
Used Homes: An Alternative for Young Buyers
According to Tuhabi, beyond the desire for something new, young adults prefer living in well-connected areas with access to public transportation, services, cultural spaces, and work centers.
Such locations, typically in central or intermediate zones, rarely have new housing developments, and when they do exist, their prices are considerably higher. In this scenario, used homes have become one of the most sought-after alternatives for property buyers due to their better cost-benefit ratio.
“The used homes market presents a real opportunity for young buyers, not only because of the more affordable prices but also because many of these properties are located exactly where they want to live: in central, well-connected areas with active urban life,” said Juan Sebastián Sokoloff, Vice President of Data and Analytics at Tuhabi.
According to the proptech, in some urban areas, the price per square meter for a second-hand house can be 20% to 30% lower than a new property, with locations much closer to the heart of cities, entertainment centers, services, and transportation networks.
Demand Trends for Used Homes
Data from the National System of Information and Housing Indicators (SNIIV) shows that in 2024, there were 234,000 mortgages for existing homes and 252,000 for new properties, confirming the trend in demand for second-hand homes.
“Our priority is to reduce friction in the real estate process. We know that for many young adults, this is their first experience buying a home, so we work to ensure they have the necessary information, tools, and confidence to make a good decision,” Sokoloff pointed out.
Key Questions and Answers
- What challenges do young adults face when trying to buy a home? Young adults are facing high real estate prices, rising credit costs, increasing land values, and average salary levels that make acquiring a home difficult.
- How long might it take a young adult to save for a home without financing? Based on current income levels and housing prices, it could take young adults around 30 years to save enough for a home without seeking mortgage financing.
- What makes used homes an attractive option for young buyers? Used homes often provide a better cost-benefit ratio, with prices typically 20% to 30% lower than new properties and locations closer to city centers.
- What trends are observed in the demand for used homes? Data indicates that more young buyers are opting for existing homes, with 234,000 mortgages issued for used properties in 2024 compared to 252,000 for new ones.
