Background on Relevant Figures and Context
In an economic climate marked by a tariff war instigated by the U.S. government, weakening employment prospects, and lower growth expectations, Mexico’s housing prices presented both good and bad news during the first quarter of 2025.
The Sociedad Hipotecaria Federal (SHF) released its housing price index for Mexico, which showed that the average housing value increased by 8.2% compared to the same period in 2024, reaching a national average of 1.859 million pesos.
The Bad News
- Despite this deceleration, the growth in average housing prices nationwide was more than twice that of general inflation, which stood at 3.80% in March of the current year.
The SHF housing price index is based on registered home sales through mortgage credit over a specific period.
Market Trends and Impact
According to BBVA Research, the upward trend in housing prices over recent years indicates a market preference for high-end homes. This is beneficial for those who have already purchased a home, as their investment value grows. However, 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 rising trend in housing prices.
By Conditions
According to the SHF index results, new housing saw an 8% increase in Q1 2025, while used homes rose by 8.3% annually. The report indicates that during this period, used homes accounted for 62.5% and new properties made up 37.5% of the market.
- Single-family homes: 8.2% annual increase
- Multi-family homes and apartments: 8.1% annual increase
- Economic-social housing: 10.3% annual increase
- Middle-range residential housing: 6.9% increase
By Entity
The SHF report states that 21 entities exceeded the national average (8.2%) in housing price variations during Q1 2025, including:
- Tlaxcala: 14.7% increase
- Quintana Roo: 12.2% variation
- Baja California Sur: 11.7% growth
- Nayarit: 10.9% increase
- Colima: 10.9% growth
- Baja California: 10.9% increase
Eleven entities registered variations below the national average, such as:
- Mexico City: 4.9% increase
- Sinaloa: 5% growth
- Estado de México: 5.6% increase
- Guerrero: 5.8% growth
By metropolitan area, Tijuana, Baja California, saw a 11.1% increase in housing prices during the first quarter of the year, followed by León, Guanajuato (10.9%) and Guadalajara (9.8%).
Key Questions and Answers
- What is the current housing price trend in Mexico? Housing prices have shown an upward trend, increasing by 8.2% in Q1 2025 compared to the same period in 2024.
- How do housing prices compare to inflation? Despite the deceleration, housing price growth is more than twice that of general inflation (3.80% in March 2025).
- What does this mean for homebuyers? Existing homeowners benefit from increased property values, but affordability remains a significant issue for potential buyers.
- What solutions are suggested to address the housing affordability problem? Expanding housing supply is proposed as a way to make homes more accessible and moderate rising prices.
