Introduction
The construction of housing in Mexico is not progressing at a pace necessary to meet new housing needs or reduce the existing backlog. In 2025, only around 130,000 homes were built, while the demand hovers near 300,000 units annually.
Experts Identify Structural Issues
According to experts, this phenomenon is due to structural problems that have prevented housing supply from meeting real household needs, creating a gap between what is built and what is required to satisfy demand, especially for low-income households.
Marisol Becerra’s Perspective
Marisol Becerra, Director of Strategy and Consulting at Monopolio/DD3, highlights that the primary issue lies not in housing demand but a misalignment within the market between what is produced and what families can afford or need.
“The purchase occurs when price, household income, credit, and type of housing align. If any factor is off, the decision gets postponed, and households adjust their search,” Becerra explained.
Becerra further elaborates that this misalignment manifests in various aspects, such as land prices rising faster than income, reducing purchasing power and causing credit levels to not match current values. Additionally, the available housing does not meet households’ needs for connectivity, services, and access to employment.
Land Price Increases and Limited Inventory
Leonardo González, Director of Information at Homepty, identifies two significant obstacles to expanding affordable housing supply: the rising cost of urban land and a shrinking available inventory.
“The Sociedad Hipotecaria Federal’s (SHF) Housing Price Index shows that land accounts for 28% to 45% of a home’s final price in metropolitan areas, a percentage that has been steadily increasing over the past decade,” González stated.
González explains that this increase in land costs has limited affordable housing production in consolidated areas, pushing development to peripheral zones with cheaper land but limited connectivity, infrastructure, and services.
Becerra adds that the available inventory has also decreased significantly, falling from nearly 600,000 homes in 2015 to just 248,000 in 2025—a nearly 60% drop. The contraction has been more pronounced in the economic and popular housing segments, shrinking from 355,000 homes to around 122,000 in the last decade.
Financial Environment Pressures Access to Housing
The financial environment has further complicated access to housing, as available credit becomes increasingly limited despite the availability of home loans.
“Interest rates have remained around 10.3%, while housing values continue to grow at an annual rate of 8% to 9%. This combination has made it more financially burdensome for even formally employed households to acquire a home,” Becerra noted.
According to SHF data, the national average housing price increased by 8.7% in the first nine months of the year, averaging 1,862,524 pesos.
Public Policy Faces the Challenge
The government has attempted to reduce the housing backlog, estimated at around 8 million households, first by focusing on housing improvement actions and later through a plan to build 1.8 million homes during the current administration, prioritizing those earning up to two minimum wages per month (approximately 17,000 pesos).
González warned that the program faces significant challenges in achieving scale impact, particularly regarding execution and volume, given the magnitude of the housing deficit.
Becerra emphasized that the program must align with real market supply and demand conditions. By 2025, over 300,000 homes were reported in contracted and pending projects, with more than 216,000 applicants registered. However, the immediate challenge is ensuring projects translate into actual deliveries and well-located housing.
