Is the property market in Mexico still growing?

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Is Mexico’s property market still growing right now?

Yes. Mexico’s property market is still growing, with national home prices up 7.9% in the first half of 2026 and every state still recording positive annual appreciation.

The latest SHF housing-price index gives us the clearest nationwide picture. Homes bought with mortgage financing gained 7.3% year over year in the second quarter, bringing growth for the first half to 7.9%. Consumer inflation was running at roughly 3.4%, so Mexican property prices are still rising comfortably faster than general prices.

The growth is also unusually broad. Seventeen of Mexico’s 32 states beat the national 7.9% rate, while the other 15 still recorded increases. Guadalajara rose 11.1%, Tijuana 9.7%, Puebla-Tlaxcala 8.5% and Monterrey 8.3%.

There is one important catch. Prices are giving us a much stronger reading than sales or construction. Housing appraisals fell 1.1% in 2025, mortgage rates remain high and developers are building far fewer formal homes than several years ago. Mexico is still growing, but these days the growth comes heavily from rising prices and scarce supply rather than a huge increase in the number of properties changing hands.

Is Mexico’s housing boom slowing down?

Yes. Mexico’s housing market is still rising quickly, but the pace has clearly come down from its post-pandemic peak.

SHF recorded national appreciation of 10.9% in 2023, followed by 9.2% in 2024 and 8.7% in 2025. Growth reached 8.7% again in the first quarter of 2026 before slipping to 7.3% in the second quarter.

That looks more like a gradual cooling than a sudden turn. Annual increases have stayed positive through every year since the pandemic, including 5.8% in 2020, 7.9% in 2021 and 8.9% in 2022.

Compounding SHF's annual increases from 2019 through 2025 gives us roughly 78% nominal appreciation. So today’s 7% to 8% growth is happening after Mexican homes have already become dramatically more expensive.

The market can keep growing while feeling noticeably less exuberant than it did two or three years ago.

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Are Mexican property prices still beating inflation?

Yes. Mexican property prices are currently rising more than twice as fast as consumer inflation.

SHF measured national housing appreciation at 7.9% in the first half of 2026, while consumer inflation was around 3.4%. That leaves an approximate real increase of a little above 4%.

This distinction is useful because nominal property growth can look impressive even when inflation absorbs most of it. That is not what is happening in Mexico today. Owners are still gaining purchasing power on paper.

For buyers, of course, the same gap works against them. Homes becoming 7% to 8% more expensive while everyday prices rise around 3% means housing affordability keeps deteriorating unless household incomes catch up.

How much more expensive is Mexican property than before the pandemic?

Mexican homes are much more expensive than before the pandemic, with the typical mortgaged property now costing roughly twice what it did in 2019.

According to SHF, the median value of a mortgaged home was about 631,000 pesos in 2019. By 2025, it had climbed to approximately 1.21 million pesos, an increase of around 92%.

The average moved from roughly 1.09 million pesos to 1.86 million pesos over the same period, a gain of about 70%. During the latest first half, SHF put the national median near 1.30 million pesos and the average close to 1.96 million pesos.

Those numbers explain why the market can feel much less affordable even though annual percentage growth has started to cool. Another 8% increase today adds far more pesos to a home’s price than an 8% increase did six years ago.

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Does Mexico still have enough housing demand to keep prices rising?

Yes. Mexico still has a huge pool of housing demand, although millions of households cannot necessarily afford to turn that need into a purchase.

Mexico’s National Housing Program estimated that roughly 8.86 million households had some form of housing deficit in 2024, equal to 22.8% of all households. Demographic projections used by the government also point to roughly 500,000 additional homes being needed each year as new households form, with the annual requirement expected to move toward 550,000 around 2030.

That is a very large underlying demand base.

The complication is affordability. A household that needs a better home does not automatically become a buyer. Higher property prices, mortgage rates around 10% or more and limited access to formal credit keep part of that demand trapped in renting, informal housing or overcrowded homes.

Even so, Mexico does not currently have a lack-of-demand problem. The bigger issue is getting enough appropriately priced homes built for the people who need them.

Is Mexico building enough homes?

No. Mexico is still building too little formal housing relative to the number of households that need homes, and that shortage is helping prices stay high.

Registro Único de Vivienda data analyzed by SHF show 262,977 new-home registrations in 2018. By 2024, the figure had fallen to 178,599, a drop of 32%.

The weakness continued into 2025, when first-half registrations fell another 3.9% year over year to 91,581.

Meanwhile, Mexico needs roughly half a million additional homes annually from household formation alone. Those two measures are not perfectly comparable because not every home is produced through the formal developer system, but the gap is still large enough to show why supply remains tight.

The resale market has absorbed part of that pressure. Used homes represented 53.4% of SHF-financed purchases in 2019. Their share reached 63.1% in 2025, meaning almost two out of three mortgaged transactions now involve an existing property.

That shift fits what we see elsewhere in the data: buyers are relying more heavily on homes that already exist because formal new supply has struggled to keep up.

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Are high mortgage rates hurting Mexico’s property market?

Yes. High mortgage rates are clearly hurting affordability in Mexico, but they have slowed buyers more than they have slowed home prices.

Banco de México data put commercial-bank mortgage balances above 1.5 trillion pesos, so Mexico still has a large and functioning mortgage market. What buyers face today, however, is expensive credit.

Weighted rates on new bank housing loans were close to 10.1% in early 2026. SHF’s broader measure put average mortgage rates around 11.4% in the second quarter. Around 2020 and 2021, new-bank mortgage rates were often closer to 9%.

A move of even one or two percentage points makes a substantial difference on a 15- or 20-year housing loan. Buyers either accept larger monthly payments, choose a cheaper home or delay the purchase.

Yet national property prices are still up 7.9%. The housing shortage and underlying demand are strong enough, for now, to keep prices rising despite expensive financing.

If rates stay around today’s levels while economic growth weakens, we would expect further cooling. So far, the data show pressure rather than a break in the housing cycle.

Where are property prices rising fastest in Mexico now?

Mexico’s fastest property growth currently stretches across tourism states, border economies and several industrial regions rather than clustering in one part of the country.

SHF puts Tamaulipas at roughly 11.8% appreciation in the first half of 2026, followed by Quintana Roo at 11.5%, Jalisco at 11.2%, Aguascalientes at 10.7% and Nayarit at 10.6%.

Baja California rose 9.9%, Baja California Sur 9.8%, Yucatán 9.6%, Sinaloa 9.5% and Sonora 9.4%.

There is no single story behind those numbers. Quintana Roo, Nayarit and Baja California Sur get substantial demand from tourism, second homes and migration. Baja California and Sonora benefit from their border economies and manufacturing. Jalisco combines Guadalajara’s large employment base with internationally popular coastal areas.

That mix shows that Mexico’s housing growth does not depend on one narrow theme such as foreign buyers or nearshoring. Several different local economies are producing above-average appreciation at the same time.

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Is Guadalajara’s property market really growing faster than Mexico City?

Yes. Guadalajara is currently appreciating far faster than Mexico City, with an 11.1% increase versus just 4.6% across the Valle de México metropolitan area.

At state level, Jalisco gained about 11.2%, while Mexico City recorded only 3.9%, the weakest increase among Mexico’s 32 states.

Mexico City is still vastly more expensive. SHF put its average mortgaged-home valuation near 4.29 million pesos in the first half of 2026, compared with a national average of about 1.96 million pesos.

That high starting price makes another year of double-digit appreciation harder. Guadalajara still offers a major metropolitan economy, technology and manufacturing employment and lower absolute housing prices, giving it more room to move.

So the old shorthand that “Mexico City drives Mexican property” is too crude for the current market. Mexico City remains the country’s deepest and most expensive housing market, while Guadalajara currently has much stronger price momentum.

Are Mexico’s coastal property markets still booming?

Yes, several of Mexico’s main coastal property markets are still growing faster than the country as a whole.

Quintana Roo recorded approximately 11.5% appreciation in the latest first-half data. Nayarit reached 10.6%, Baja California Sur 9.8% and Yucatán 9.6%. All four beat Mexico’s 7.9% national average.

These states have several sources of demand overlapping at once. Tourism brings workers and investors. Domestic migration adds permanent residents. Foreign buyers can purchase with incomes or savings earned outside Mexico. In the best-known coastal areas, prime land is also naturally limited.

Baja California Sur shows how far that can push prices. Its average SHF property valuation reached about 2.62 million pesos, second only to Mexico City at state level and well above the national average.

We still have to be careful at city level. Tulum can have very different condominium inventory from Playa del Carmen, while Los Cabos behaves differently from La Paz. A strong state index does not guarantee that every development is easy to resell or profitable as a rental.

At the broader level, though, Mexico’s major tourism states are clearly still participating in the property upswing.

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Is nearshoring still pushing up property prices in Mexico?

Yes, nearshoring and industrial investment are still supporting housing demand in several Mexican cities, especially across the north and major manufacturing hubs.

Mexico attracted roughly $35 billion of foreign direct investment in the first half of 2026, according to Economy Ministry figures, with manufacturing accounting for around $13.5 billion.

Some of the states receiving major investment are also producing strong housing gains. Nuevo León attracted roughly $3.7 billion and its housing prices rose 8.3%. Baja California received around $1.7 billion and prices rose 9.9%. Jalisco attracted about $1.4 billion while home values increased 11.2%.

The relationship takes time. A factory announcement alone does very little to a housing market. Repeated investment eventually brings workers, suppliers, logistics businesses and infrastructure spending, and those effects have now accumulated for years in places such as Monterrey and Tijuana.

Nearshoring is only part of Mexico’s housing story, though. Tourism-heavy Quintana Roo and Nayarit are also among the country’s fastest-growing markets. Industrial investment helps explain several regional winners without explaining the whole country.

Are cheaper homes rising faster than expensive homes in Mexico?

Yes. Mexico’s cheaper housing is currently appreciating faster than middle- and higher-priced housing, which says a lot about where the shortage is most severe.

SHF reported a 10% increase for economic-social housing during the first half of 2026. Middle-residential housing appreciated just 6.7%.

That 3.3-point gap is striking because lower-income buyers have less room to absorb rising mortgage payments. Stronger appreciation at the cheap end therefore looks less like a surge in purchasing power and more like too many households chasing too little affordable supply.

The rest of SHF’s breakdown supports that reading. Detached homes gained 8.4%, new housing 8.3%, used housing 7.5%, and apartments and condominiums 7.4%.

For buyers searching at the bottom of the market, Mexico’s property slowdown may therefore be difficult to feel. The part of the housing stock they can actually afford is currently rising faster than the national average.

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Can Mexico’s huge government housing program cool property prices?

Potentially, yes. Mexico’s 1.8 million-home Vivienda para el Bienestar program has become large enough to affect supply, but it has not yet been running at a scale that would erase the national shortage.

The latest government figures make the program more concrete than it was a year ago. Around 274,000 homes were already under construction by mid-2026, roughly 604,000 had been contracted to enter construction, and 24,500 had been delivered.

The full target is 1.8 million homes over the presidential term. Earlier government reporting also said around 400,000 homes had been formalized for construction during 2025, with another 400,000 planned during 2026.

Those are meaningful numbers against a private housing market that has struggled to produce enough new stock.

The limitation is scale relative to the problem. Mexico adds housing needs for roughly half a million new households each year and already has millions of households living with some form of housing deficit.

If construction and delivery keep accelerating, this program could eventually take some pressure off the lower-priced market. For now, the newest data show a serious supply response taking shape, but not enough completed housing yet to declare the shortage solved.

Are homes selling as fast as prices are rising in Mexico?

No. Mexican home prices are rising much faster than the available measures of transaction activity.

SHF reported that housing appraisals declined 1.1% in 2025 after increasing 4.8% in 2024. Over that same 2025 period, national home prices rose 8.7%.

Appraisals are only a proxy for transactions, since SHF’s dataset focuses on properties involving mortgage financing. Still, the divergence is hard to ignore.

A market where prices gain almost 9% while appraisal activity slips slightly does not look like buyers are rushing in at any price. More likely, limited inventory is allowing sellers to achieve higher prices even as expensive mortgages keep transaction volumes restrained.

Formal housing construction is also well below its 2018 level. Put those pieces together and Mexico’s current growth looks quite different from a classic credit-fueled boom.

Prices are strong. Turnover is much less impressive.

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Is Mexico’s property market in a bubble?

Probably not nationally. Mexico currently lacks several features we would normally expect to see in a broad housing bubble.

Cheap credit is certainly absent: mortgage rates are around 10% to 11%. Developers are also far from flooding the market with new homes, given the large fall in formal registrations since 2018. Transaction proxies are muted rather than euphoric, while Mexico still has a large structural housing deficit.

Those conditions make today’s national price growth easier to explain through scarcity than through speculative excess.

Local markets are a different question. Tourist areas with heavy investor buying, short-term rentals and foreign demand can detach from local salaries. Individual neighborhoods can also accumulate too many new condominiums even while Mexico as a whole lacks housing.

Tulum is an obvious example of why a buyer should look at local inventory, absorption and resale demand rather than assume that Quintana Roo’s strong state-level appreciation makes every project attractive.

We would therefore be much more worried about pockets of overpricing than about one giant Mexican housing bubble.

What could finally make Mexican property prices stop rising?

A real national property downturn in Mexico would probably require weaker employment and investment to hit at the same time as affordability deteriorates further.

Affordability is already the clearest constraint. Homes continue gaining around 7% to 8% nationally while mortgage rates sit near double digits. Buyers cannot absorb that combination indefinitely unless incomes rise as well.

Economic weakness could provide the second hit. Monterrey, Tijuana, Guadalajara and other fast-growing markets depend heavily on employment and investment. A prolonged industrial slowdown would eventually feed through to housing demand.

More supply could cool prices for a healthier reason. The government’s housing program is now putting hundreds of thousands of homes into construction, and a recovery in private development would add further inventory. Enough new housing could bring appreciation down without causing a crash.

These risks are real, but none has yet overturned the national trend. The latest SHF reading still has all 32 states in positive territory.

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So, is Mexico’s property market still growing?

Yes. Mexico’s property market is still growing, but the boom has clearly matured and buyers should no longer assume that every part of the country will keep rising at the same pace.

The national SHF index is up 7.9%, well ahead of inflation. Guadalajara, Tijuana and several coastal, border and manufacturing states are still posting very strong gains. Even the weakest state markets remain positive.

At the same time, annual appreciation has cooled from 10.9% in 2023 to the high-single digits, mortgage rates remain around 10% or more, transaction activity is soft and formal housing production has fallen sharply from its pre-pandemic level.

The shortage explains much of the apparent contradiction. Mexico keeps adding households and still has millions of families with unmet housing needs, while the country has struggled to build enough homes at prices buyers can afford. Scarcity keeps pushing property values higher even without a frenzy of mortgage borrowing or transactions.

So the direct answer is yes, with considerably more nuance than a few years ago. Mexico still has a growing property market, and some cities are growing extremely fast. But today it is a fragmented, supply-constrained market where location and price segment matter much more than the national headline.

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Who is the author of this content?

THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Mexico. If you’d like to learn more about us, you can check our presentation page.