The housing market in Mexico is going through a significant contraction, marked by the fall in mortgage credit and the weakening of household purchasing power, according to an analysis by BBVA México.
In the first half of the year, the total number of mortgages granted fell 9% and the total amount 4.5% compared to the same period in 2024.
In addition, commercial banks had a reduction of 6.8% in the number of mortgages for acquisition and 10.3% in amount, while public organizations, Infonavit and Fovissste, also reported decreases in origination.
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In parallel, the delinquency rate reached 3%, which, although not a sign of alarm, does show greater payment difficulties on the part of borrowers, according to the financial group’s “Real Estate Situation” report.
Even though plans have been announced to build 1.7 million homes, data in the Single Housing Registry show a decline of 8.2% in new projects and the inventory grew 7.6% after two years of declines.
BBVA added that housing appreciation, which remains above 8% annually, has far outpaced income growth, exacerbating the lack of affordability.
He stressed that the market faces a double challenge: expanding access to mortgage credit in a sustainable manner and guaranteeing a greater supply of affordable housing, especially in the social interest segment, where the greatest need and the least financial dynamism are concentrated.
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The report observes that the mortgage market maintains a marked regional concentration, with a strong dependence on large metropolitan centers that together absorb more than half of the total financing.
The concentration of mortgage credit is closely related to the distribution of formal employment and income, which are also concentrated in the most developed industrial and urban areas.
While the northern and Bajío states drive job growth and show stronger mortgage portfolios, those in the south face higher delinquency rates.
In terms of prices, housing appreciation remains more dynamic in the tourist and northern states, while large metropolitan areas are beginning to stabilize.
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The BBVA Mexico study estimates a potential demand of 7.5 million homes for the coming years, of which 41.6% corresponds to the traditional segment and 35.2% to the social interest segment, which reflects that most of the demand comes from low and middle-income households, which require affordable solutions and access to formal financing.
Demand is strongly concentrated in six entities, while the southern and southeastern states have a much smaller participation.
This territorial concentration poses important challenges for the planning of public policies and the orientation of investments towards less developed local markets.
On the other hand, a disconnection is observed between the location of demand and the supply of housing projects, since some states with high demand have a low proportion of loans granted and few projects in execution, while others with less housing pressure have an oversized supply.
For this reason, BBVA explained, it is necessary to balance the housing policy, expanding inclusive financing and aligning the housing supply with the true regional needs of the country.
He added that the increase in the budget for public works by up to 652,000 million pesos would be a stimulus to the sector.
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