Good article in the Daily Times about the Mexican real estate market. Here’s a summary, but you can read the whole article here.
- So far the sub-prime crisis has had limited impact on Mexico’s mortgage market.
- Mexican mortgages carry fixed interest rates, not sub-primes or ALTs.
- Deliquency rates for mortgages over 90-day late is at 5% whereas in the USA they are at 21% for adjustable rate sub-prime mortgages.
- Mexico does not have a liquid secondary market where mortgage securities can be traded, which has caused such problems in the USA.
- Mexicans carry far less debt than Americans do. Mortgage debt represents less than 10% of GDP, compared to 82% of GDP in the USA, a ratio that has increased fourfold in the last two decades.