Mexico’s housing market remains healthy, amidst improving economic conditions. The nationwide house price index rose by 7.72% during the year to Q2 2021, following y-o-y increases of 6.59% in Q1 2021, 5.38% in Q4 2020, 5.02% in Q3, and 4.78% in Q2, according to the Sociedad Hipotecaria Federal (SHF). When adjusted for inflation, house prices increased 1.67% y-o-y in Q2 2021.

On a quarterly basis, house prices rose by 2.29% (0.87% inflation-adjusted) during the latest quarter.

In the past three years, the value of the Mexican peso (MXN) depreciated by 6.1% against the US dollar, to reach an average exchange rate of USD 1 = MXN 20.087 in August 2021.

Since the Mexican housing market is not driven by speculators, it has been resilient despite the pandemic. In fact, house prices are expected to continue rising during the remainder of the year, according to local real estate experts.

Foreign demand is also robust. Despite the pandemic, American and Canadian buyers continue to return to Mexico, after a several-year slump, thanks to low oil prices and the strong US dollar, pushing home values up. More than 1 million Americans live in Mexico, and more than 500,000 own homes in the country, according to a Forbes article.

During 2020, the economy tumbled by a huge 8.2%, its biggest annual contraction since the 1930s, according to the National Institute of Statistics and Geography (INEGI). But economic conditions are now dramatically improving. Mexico’s economy recorded a whopping 19.6% year-on-year growth in Q2 2021, after eight consecutive quarters of economic downturn, as the country battled the twin impact of the COVID-19 pandemic and energy shortages.

Because of the economy’s strong performance during the latest quarter, the International Monetary Fund (IMF) has recently revised upwards its 2021-22 growth forecast for Mexico to 6.3% from its initial estimate of a 5% expansion.