Mexico’s housing prices surge nearly 10% in 2024, outstripping inflation

Buying a home in Mexico cost 9.5% more on average in the first half of 2024 than in the same period of last year, according to a federal government agency.

Data from the Federal Mortgage Society (SHF) shows that the average cost of a home in Mexico between January and June was 1.724 million pesos (US $92,500 at today’s exchange rate).

The average price encompasses both apartment and house prices and is calculated from data on homes purchased using a mortgage.

The year-over-year increase in housing prices was almost double the prevailing annual headline inflation rate at the end of June, which was 4.98%. It is the second-highest increase in housing prices during the first half of a year since 2015. The first-highest occurred in 2023, when the annual spike was 11.6%.

Rising home costs: where and why

SHF data shows that Mexico’s most expensive place to buy a home is Mexico City, while the cheapest is Durango. (See below)

Baja California Sur, which includes the popular resort city of Los Cabos, saw the biggest annual increase in housing prices, at 14.7%.

The 9.5% increase in residential property prices across Mexico in the first half of the year coincided with a 0.4% decline in the construction of new dwellings, according to public data. Among the factors behind the annual decline in new home construction was an increase in building costs.

A total of 60,451 dwellings were built between January and June of 2024.

Analysts at BBVA México said that constant demand was a factor in the year-over-year increase in property prices.

Jorge Combe, director general of real estate sector company DD360, told the El Economista newspaper that margins for real estate developers have declined due to a range of factors, including inflation for construction materials and high interest rates.

Property prices in central Mexico 

The average price of a Mexico City home was 3.933 million pesos (US $211,000) in the first half of the year, a 5.8% increase compared to the same period of 2023.

Mexico City is easily the most expensive place in the country to buy a home, with prices averaging much higher than those in Baja California Sur — the country’s second most expensive residential real estate market — and Querétaro, the third most expensive market.

There are significant variations in the prices of houses and apartments in the capital, depending on the location. Needless to say, prices in desirable, upscale and well-located neighborhoods such as Polanco and Condesa are far higher than prices in less-developed districts on the city’s periphery.

In neighboring México state, which includes many municipalities that are part of the greater Mexico City metropolitan area, the average house price is less than half that of the capital. Prices in México state increased 8% annually to 1.742 million pesos (US $93,400), just above the national average.

Listed below (from most expensive to cheapest) are the average housing prices for other states in central Mexico in the first half of the year.

• Morelos: 2.058 million pesos (US $110,300), an annual increase of 9.6%.
• Puebla: 1.688 million pesos (US $90,500), an annual increase of 11.3%.
• Hidalgo: 1.205 million pesos (US $64,600), an annual increase of 8.4%.
• Tlaxcala: 1.076 million pesos (US $57,700), an annual increase of 6.5%.

How much does a home cost in the Bajío?

The Bajío region of Mexico — an industrial hub — includes large cities such as León and San Luis Potosí city and popular tourism destinations such as San Miguel de Allende and Guanajuato city. Average housing prices in those places are considerably higher than in rural parts of the region.

Listed below (from most expensive to cheapest) are the average housing prices in the first half of the year for states that are wholly or partially located within the Bajío region.

• Querétaro: 2.199 million pesos (US $113,600), an annual increase of 10.5%.
• Jalisco: 1.861 million pesos (US $99,700), an annual increase of 9.2%.
• San Luis Potosí: 1.513 million pesos (US $81,100), an annual increase of 10.6%
• Guanajuato: 1.379 million pesos (US $73,900), an annual increase of 10.6%.
• Aguascalientes: 1.344 million pesos (US $72,000), an annual increase of 9.2%.
• Zacatecas: 1.134 million pesos (US $60,800), an annual increase of 6.7%.

Housing costs in Mexico’s southeast 

Tourism hotspots such as Cancún and Playa del Carmen and the growing city of Mérida, the capital of Yucatán, are among the places in southeastern Mexico where housing prices are above the average. The newly-built Maya Train railroad runs through this region, which is known for white sand beaches, pretty colonial cities, awe-inspiring archaeological sites and the long-established Indigenous Maya culture.

Listed below (from most expensive to cheapest) are the average housing prices in the first half of the year for Mexico’s southeastern states.

• Yucatán: 2.026 million pesos (US $108,700), an annual increase of 9.6%.
• Quintana Roo: 1.743 million pesos (US $93,500), an annual increase of 12.7%. 
• Campeche: 1.455 million pesos (US $78,100), an annual increase of 10.7%. 
• Tabasco: 1.408 million pesos (US $75,500), an annual increase of 10.6%.
• Veracruz: 1.243 million pesos (US $66,700), an annual increase of 8.2%. 

The real estate market in northern Mexico 

Large cities such as Monterrey and Ciudad Juárez are located in northern Mexico, which is also home to a large number of export-oriented factories known as maquiladoras or maquilas. Also located in the region is the picturesque Baja California peninsula, divided into two separate states.

Listed below (from most expensive to cheapest) are the average housing prices in the first half of the year for Mexico’s northern states.

• Baja California Sur: 2.260 million pesos (US $121,200), an annual increase of 14.7%.
• Baja California: 1.916 million pesos (US $102,700), an annual increase of 12.6%.
• Sinaloa: 1.815 million pesos (US $97,300), an annual increase of 9.2%.
• Nuevo León: 1.751 million pesos (US $93,900), an annual increase of 11.5%.
• Sonora: 1.585 million pesos (US $85,000), an annual increase of 12.1%.
• Chihuahua: 1.418 million pesos (US $76,000), an annual increase of 10.6%.
• Coahuila: 1.273 million pesos (US $68,200), an annual increase of 8.8%.
• Tamaulipas: 1.027 million pesos (US $55,000), an annual increase of 8.8%.
• Durango: 978, 774 pesos (US $52,500), an annual increase of 10.3%.

Property prices in the southern states 

Mexico’s most disadvantaged states are located in the south. The region is also home to popular tourism destinations, including Oaxaca city, Acapulco and San Cristóbal de las Casas.

Listed below (from most expensive to cheapest) are the average housing prices in the first half of the year for Mexico’s southern states.

• Oaxaca: 1.618 million pesos (US $86,700), an annual increase of 11.5%.
• Michoacán: 1.578 million pesos (US $84,600), an annual increase of 6.4%.
• Guerrero: 1.518 million pesos (US $81,400), an annual increase of 7.3%.
• Chiapas: 1.339 million pesos (US $71,800), an annual increase of 11.5%.

How much does a home cost in western Mexico?

Listed below (from most expensive to cheapest) are the average housing prices in the first half of the year for two states in western Mexico.

• Nayarit: 1.757 million pesos (US $94,200), an annual increase of 11.7%.
• Colima: 1.349 million pesos (US $72,300), an annual increase of 10.6%.

With reports from El Economista