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A view of the Angel of Independence, a landmark of Mexico's capital Mexico City, and its surrounding cityscape. / AFP, Yonhap

As housing prices soar in Mexico, the burden of homeownership on ordinary citizens is mounting steadily. With the gap between the growth rates of home prices and incomes widening year after year, lowering mortgage rates alone is insufficient to ease housing burdens, calling for expanded housing supply and job creation as key solutions.

According to local business daily El Economista on the 20th (local time), Spanish financial analysis institution BBVA Research stated in its report "Mexico Real Estate Situation 2H 2026" released on the 13th that the housing price index last year surged 108.5% compared to 2016, while the income index rose by only 25% over the same period.

The report based this analysis on the housing price index and income index compiled by the Federal Mortgage Society (SHF) of Mexico, which surveyed prices of homes transacted via mortgage loans and the incomes of borrowers.

Setting both the housing price index and income index to a baseline of 100 in 2016, the growth rate gap widened with each passing year. In 2018, the growth rate of the housing price index outpaced that of income by 15.1 percentage points, and that disparity expanded to 44.3 percentage points in 2020, 54.3 percentage points in 2022, 80.3 percentage points in 2024, and 83.6 percentage points in 2025.

The report advised that expanding supply is necessary to address the issue. Samuel Vázquez, chief analyst at BBVA Research Mexico, noted, "Expanding mortgage credit alone can never resolve the sharp surge in housing prices and the widening income gap," presenting supply expansion as the solution.

BBVA Research also stated that pursuing income growth by expanding quality jobs must be undertaken in tandem to tackle the challenge. The rationale is that quality formal jobs generating higher earnings must be created so that potential housing demand can expand over the medium to long term.

Although mortgage interest rates in Mexico have turned toward a gentle decline, they remain at burdensome levels for facilitating credit access among low-income households. The average mortgage rate edged down slightly from 10.2% at the end of last year to 10% in the first half of this year.

BBVA Research emphasized that marginal interest rate cuts cannot drive loan demand, arguing that policy efforts are required to expand housing supply alongside creating quality jobs guaranteeing incomes sufficient to bear mortgage interest rates.

                                                                                                           Son Young-sik