Introduction
In an economic climate marked by a tariff war instigated by the U.S. government, weakening employment, and diminished growth prospects, Mexico’s housing prices presented both positive and negative news during the first quarter of 2025.
The Sociedad Hipotecaria Federal (SHF) Report
The Sociedad Hipotecaria Federal (SHF) released its housing price index for Mexico, which showed that the average home value increased by 8.2% compared to the same period in 2024, reaching a national average of 1,859,043 pesos.
The Good and Bad News
- The bad news: Despite this deceleration, the growth in the average housing price nationwide was more than twice that of the general inflation, which stood at 3.80% in March of the current year.
Understanding the SHF Index
The SHF housing price index is based on registered home sales through mortgage credit during a specific period.
BBVA Research Analysis
According to BBVA Research, the upward trend in housing prices over recent years indicates a market preference for high-end homes. This is good news for those who have already purchased a home, as their investment value increases, but it also highlights the lack of affordable housing in Mexico.
“The problem of unaffordability remains one of the main issues in the current market, and the continuous evolution towards higher prices requires a solution prioritized immediately,” states the BBVA Research report.
BBVA Research suggests that expanding housing supply could help more people access homes and moderate the upward trend in housing prices.
By Conditions
According to the SHF index results, new housing saw an 8% increase in the first quarter of the year, while used homes rose by 8.3% annually. The report indicates that during this period, there was a 62.5% proportion of used homes and 37.5% of new properties.
- Single-family homes increased by 8.2%
- Condos and apartments rose by 8.1%
- Economic-social housing increased by 10.3%
- Middle-range residential housing rose by 6.9%
By Entity
The SHF report states that 21 entities exceeded the national average (8.2%) during the first quarter of the year, including:
- Tlaxcala with a 14.7% increase
- Quintana Roo with a 12.2% variation
- Baja California Sur grew by 11.7%
- Nayarit increased by 10.9%
- Colima grew by 10.9%
- Baja California increased by 10.9%
Eleven entities had variations below the national average, such as:
- Mexico City with a 4.9% increase
- Sinaloa grew by 5%
- Estado de México had a growth of 5.6%
- Guerrero increased by 5.8%
By metropolitan area, Tijuana, Baja California, saw a 11.1% increase in housing prices during the first half of the year, followed by León, Guanajuato (10.9%), and the Guadalajara zone (9.8%) compared to the same period in 2024.
Key Questions and Answers
- What is the Sociedad Hipotecaria Federal (SHF)? The SHF is a Mexican development bank that promotes homeownership through mortgage financing.
- Why is the housing price growth more than double the inflation rate significant? This indicates that housing prices are rising faster than general price levels, which could signal a housing affordability issue.
- What does BBVA Research suggest to address the housing affordability problem? They propose expanding housing supply as a solution to make homes more accessible.
