Mexico Housing Backlog Hits 8.38 Million as Output Slumps

Mexico’s housing market is facing a widening mismatch between need, supply, and affordability. While official data shows millions of households still living in inadequate conditions, annual homebuilding has fallen sharply over the past decade, even as prices continue to rise.

Mexico’s Expanded Housing Backlog (RHA) reached 8.38 million homes in 2024, equivalent to 21.9% of the country’s 38.36 million occupied homes, according to the Federal Mortgage Society (SHF). Of those, 1.1 million homes see overcrowding, 7.2 million were built using precarious construction materials, and 93,006 homes lack toilet facilities.

The figures point to a challenge that is not only about producing more housing units, but also about upgrading habitability standards, basic services, and the structural quality of existing homes.

Housing Production

Housing production has trended downward across the last 10 years. According to INFONAVIT’s Single Housing Register, annual output fell from 301,866 homes in 2015 to 128,142 in 2024, before ticking up to 138,645 in 2025.

Even with the rebound in 2025, output remains 54% below 2015 levels, although 2025 rose 8.1% year over year compared to 2024. The pattern underscores how today’s backlog is being shaped both by long-term housing underproduction and by the persistence of substandard housing conditions.

Prices Rise Faster Than Activity Indicators

Despite weaker market activity signals, home prices have continued to appreciate. SHF reported that its Housing Price Index rose 8.9% year over year in the third quarter of 2025. On a year-to-date basis, prices increased 8.6%.

At the same time, SHF noted a 2.2% decline in the number of appraisals during the first nine months of 2025 compared to the same period of 2024, a data point often read as softer transactional activity or a cooling pipeline.

Price growth also remained broad-based across segments. The price of new housing increased 8.4% between January and September 2025, while the price of second-hand housing increased 8.7% during the same period. The market presented a mix of 63.8% second-hand housing and 36.2% new housing. 

The data suggests affordability pressure is intensifying most in lower-cost segments, precisely where unmet demand and public-policy focus are often concentrated.

Sheinbaum Administration Expands Housing Targets

Against this backdrop, President Claudia Sheinbaum’s administration has positioned housing as a flagship social and economic policy. In late 2025, Sheinbaum said her first year would close with more than 6,000 new homes delivered through INFONAVIT, FOVISSSTE, and CONAVI, while also pursuing a broader agenda to restructure 5 million INFONAVIT loans deemed previously unpayable, build 1.3 million new homes of at least 60m², and deliver 430,000 home-improvement projects, including for families without INFONAVIT or FOVISSSTE benefits.

This week, SEDATU raised the scale of the government’s housing ambition under the Housing Program for Wellbeing, stating it will deploy MX$1.1 trillion (US$61.43 billion) across the six-year term to build 1.8 million homes nationwide, aiming to reduce an estimated national housing deficit of about 8.3 million homes.

SEDATU also projects broader economic spillovers, including a MX$1.6 trillion (US$89.35 billion) national economic impact and more than MX$130 billion (US$7.26 billion) in local economic activity across states, linked to construction supply chains such as concrete and cement, and steel and iron.

The program aims to distribute 1.2 million homes through INFONAVIT, 500,000 homes through CONAVI, and 100,000 homes through FOVISSSTE.

The government has framed the initiative as targeted toward households with the greatest need, prioritizing women heads of household, youth, Indigenous communities, and older adults, and requiring homes to be located in safe areas, near primary and secondary roads, close to schools and health services, and with basic services such as water, drainage, and electricity, alongside green and recreation spaces.