Mexico will need 7.5 million homes in the coming years. As for the real estate epicenter, it will focus on the Valley of Mexico, Guadalajara, and Monterrey. The dynamics both reflect demographic pressures and the reconfiguration of space in Mexican cities, where economic, demographic, and infrastructure factors converge to define the next housing construction boom.
In the metropolitan areas on the periphery of the Valley of Mexico, housing projects have spread towards the edges of the state, bordering Hidalgo and Morelos. In Guadalajara, real estate growth has occupied former industrial corridors. In Monterrey, expansion is directed towards municipalities to the north—source: Research on the Real Estate Situation in Mexico, BBVA.
Real estate growth in Mexico is redrawing the geography of urban limits and reconfiguring cities towards where economic opportunities are located. The fact that new construction is shifting to neighborhoods far from city centers is not coincidental: population growth and migration are also intertwined with the location of new infrastructure, industrial development, and strong labor markets. The increase in real estate demand in Mexico, with all the weight this sector has for the country’s economy, is above all a sign of these growing points.
The Concentration of Housing Growth in Mexico
As for growth in the housing market, it will concentrate in the coming years in the country’s six largest states and a handful of metropolitan areas. The report Real Estate Situation in Mexico, Second Half of 2025, prepared by BBVA, estimates that Mexico will need 7.5 million homes in the coming years, 56.5% of which will be concentrated in six states: the State of Mexico, Mexico City, Jalisco, Nuevo León, Guanajuato, and Baja California.
“These three metropolitan areas concentrate about half of the total demand,” states the report, referring to the Valley of Mexico, Guadalajara, and Monterrey, respectively. Likewise, these three territories also hold a special position, since they are logistics hubs, and centers of industry, manufacturing, services, and commerce, where strong migration is also generated.”
These locations, where industrial corridors and high economic value coexist with demographic weight, will concentrate demand from a social-interest point of view. These states represent the center of gravity of real estate demand in Mexico, while in the south of the country, housing needs are lower, with less than 60,000 expected units in the case of Campeche, Tlaxcala, or Zacatecas. Demand is also concentrated in the north and center of the country, where economic growth and infrastructure expansion are the most robust.
“The type of housing and the market segment where it is intended to be located directly influences the territorial distribution of housing demand,” states the report. That is why population flows to new construction jobs “reflect the internal migratory flow that shows an additional preference to concentrate in regions with a greater diversity of industries and employment.”
The Type of Housing That Will Boost Growth
The nature of demand also changes depending on its socioeconomic characteristics. If we look at the number of homes by housing type, we find that of the total number of units, 41.6% are traditional, 35.2% social-interest, 19.9% middle income, and 3.4% residential or luxury housing. This distribution between the different segments shows, among other things, the prevalence of the affordable housing sector in the national market and the influence of the housing funds on access to housing.
If we break down demand by housing type, we find that the social-interest housing segment has the most robust demand nationwide. In this segment, demand is particularly concentrated in the most urbanized states: The State of Mexico requires the construction of nearly half a million homes, followed by Mexico City, Jalisco, Guanajuato, Puebla, and Nuevo León, which, added together, account for 51.8% of the national total. In other words, access to a job and urban infrastructure are critical factors for real estate demand in Mexico.
In contrast, the states with the least demand are Campeche, Colima, Zacatecas, and Baja California Sur. These entities present lower urban population densities, less diversified productive structures, and lower levels of industrial diversification, which translate into less internal migratory pressure, lower growth, and lower demand for housing.
Traditional Housing and the Consolidation of the Middle Class
Traditional housing (a housing type with higher values than social-interest housing but still within a fair price range) is a little more than 3 million potential units. Demand for this type of housing is also more concentrated than other types of housing, but it does appear in more areas of the country. It is a trend that is also associated with the progressive consolidation of the Mexican middle class, which seeks more secure access to housing and mortgage credit.
Traditional housing, often associated with middle-income households, opens up possibilities to access a mortgage with a more formal credit structure. It is here where demand begins to be distributed further afield from capital cities and starts to point to secondary areas of real estate demand in Mexico. Querétaro, León, or Mérida are also cities where demand will increase thanks to job creation and greater connectivity. That is why the states with the most significant demand are also those with the most industrial activity and the highest population density: State of Mexico, Jalisco, Mexico City, Nuevo León, Guanajuato, and Baja California account for 51.3% of national demand.
“Social-interest housing demand is more geographically concentrated,” says the report, “while traditional housing has a greater territorial dispersion, based on the borrowing capacity of the middle class and commercial bank credit.”
The Middle-Income and Residential Market: The Strength of the Metropolises
In this high-value segment, the territorial concentration is more pronounced. Demand for homes worth more than 2.5 million pesos, which includes the middle and residential segments, reaches 1.7 million units, which is equivalent to 23.2% of the national total. It should be noted that this demand, the one associated with the country’s most dynamic economies, largely comes from the metropolises, where employment is generated, services are concentrated, and foreign investment is attracted.
In this range, the entity with the highest demand is Mexico City, where the number of potential homes exceeds 300,000 units, followed by Jalisco, the State of Mexico, Nuevo León, and Baja California, which, added together, account for 52.5% of the national total. In this range, demand also shows other factors associated with changing consumption patterns and new housing needs, such as the emergence of mixed-use, vertical, and environmentally friendly models.
What Housing Will Be Needed?
“In short, as the value of the housing unit increases, the territorial concentration becomes more acute,” says the report. In the future, growth in the real estate sector in Mexico will be focused on the metropolitan areas in the country’s three largest conurbations, the Valley of Mexico, Guadalajara, Monterrey, and Tijuana. On the one hand, this will mean that public policy and urban management will have a decisive influence on the country’s real estate future.
It is vital that investment be channeled into public transport, services, and infrastructure, as well as improved access to credit to meet future demand. On the other hand, we should note that the most dynamic real estate growth will also be in areas with high economic value, which means that regional economic balance will be necessary to guarantee and expand the housing market in Mexico. In the BBVA report, it is also emphasized that half of the demand is in three metropolitan zones of the country, “representing a challenge for territorial planning, investment prioritization, and targeting social housing policies.”
In a context of increasingly large metropolitan areas, housing needs, services, climate adaptation, and the future of urban transport will therefore be central to understanding the real estate construction that Mexico needs. Real estate demand in Mexico and the new construction where it is focused will be one of the driving forces of the country’s economic dynamism, which is already beginning to show signs of the industrial acceleration that nearshoring can generate.