The ultimate guide for a Mexican buying house in USA

Michele Lawrie, CREO - HomeAbroad  by Michele Lawrie
8 min read
Mexicans buying house in the US

The United States is one of the top destinations for foreign real estate investment, and being the neighbors from the south, Mexicans are always looking for the best deals on real estate in the USA.

Of course, buying your own house is a dream come true for many people, but owning a house in one of the most developed countries in the world makes the most fulfilling ‘American Dream’ of owning a house in the United States come true.

So whether you are a Mexican national buying investment property in the US or are relocating to the USA and buying a primary residence, this ultimate guide is just for you!

We’ll provide some critical takeaways on Mexican citizens’ past real estate transactions in the United States, as well as some key insights that can assist Mexicans in buying US property. We will also explain how the American real estate and mortgage process works.

Yes, Mexicans can, and Mexicans do buy houses in the USA. Per the National Association of Realtors (NAR), foreign buyers from Mexico were the top five foreign buyers of US real estate. So yes, your fellow nationals are buying properties in the US, and so can you by following a few simple steps, which we will discuss in this article.

Can Mexicans buy property in the United States?

Yes, foreign nationals, including Mexican nationals, have the same rights to acquire and own real estate in the United States as US citizens do. Given specific criteria are satisfied, Mexicans can get a mortgage home loan to buy their property in the United States as well. However, it’s worth noting that you may be eligible for a mortgage even if you don’t have a credit history in the United States. Many US-based lenders will use alternative underwriting guidelines to help Mexicans get a mortgage home loan with no or thin US credit history.

US Mortgages with no US credit history

US Mortgages for Foreign Nationals & Expats

Get pre-qualified for a US Mortgage as a foreign national buyer without US credit history

If you want to know more about the US home buying process or working with a real estate agent experienced in international real estate transactions, check out this definitive guide on Buying a house in the US as a foreign national.   

How much US real estate is purchased by Mexicans every year?

According to the National Association of Realtors (NAR), nationals from Mexico accounted for 5% of foreign buyers (approximately $3 Billion) for April 2020-March 2021.

In the last 12 years, from 2010 to 2021, Mexican real estate buyers of US property have bought on average $5 billion per year worth of US real estate with an average of 18,000 units (existing home sales) bought per year.

The dollar value of Mexican real estate transactions fell from $5.8 Billion in 2019-20 to $2.9 Billion in 2020-21, mainly due to Covid-19 related travel restrictions.

Below is the table for the historical trends in dollar volume and the number of existing home purchases by Mexicans in US real estate:

Table of Historical Trend for US Existing Home Purchase by Mexican Citizens

Year# Units Purchased$ (in Billions)
201030,100$6.5
201114,800$4.2
201216,500$6.6
201315,800$3.6
201420,000$4.5
201517,900$4.9
201617,900$4.8
201728,500$9.3
201820,200$4.2
201915,900$3.7
202014,400$5.8
20217,100$2.9
Source: National Association of Realtors (NAR)

Find the best real estate agent with international expertise

Connect with a local US real estate agent(s) with CIPS designation

Where do Mexicans buy property in the US?

Texas was the most popular destination for Mexicans last year, with 29% of all Mexican national purchases occurring in the state (April 20-March 21). That said, other popular destinations included California (21%), Colorado (15%), Arizona (7%), North Carolina (5%).

Major US Destinations for Foreign Buyers from Mexico

Major US Destinations for Foreign Buyers from Mexico
Source: NAR

71% of Mexicans buy their US property in a suburban or small town/rural area, while 29% purchase in resort/central city areas.

Location preference for Mexicans buying property in the US
Source: NAR

How do Mexicans intend to use their US property?

The safe environment and the USA lifestyle attract millions of Mexicans to cross the border and live in the blinged environment of the USA. 43% of the Mexicans investing in the US property use it for their primary residence, while around 50% use it as an investment or second home.

US Property Use by foreign buyers from Mexico

Property UsePercentage (%)
Vacation Home14%
Rental Property26%
Both Vacation & Rental Property5%
Primary Residence42%
Student Use0%
Don’t Know13%
Source: NAR

Most Mexican nationals (78%) buy Detached Single-family homes in the US.

Property Type purchased by Mexicans in the US
Source: NAR

How is house prices in USA compared to Mexico?

To state the facts, the housing prices in the USA are relatively higher than in Mexico, depending upon the city and area where you might be looking. The average housing price in the US is around $325K (as per Zillow home value index) compared to the national average of $65K in Mexico (source: Statista).

However, investment in US real estate is a stable and secure investment in an appreciating asset that can even help generate positive cash flow, depending on the area you’re buying.

Average housing price in Mexico by state

The below chart provides the average housing prices in Mexico in 1Q’21 (in 1,000 Mexican pesos)

Average Housing Prices in Mexico
Average Housing Prices in Mexico (in 1000 Mexican Pesos); Source: Statista

Average housing price in USA

Per Zillow Home Value Index, the average home value in the US is $325K (as of January 2022) and is expected to rise by 17.3% in the next 1-year forecast. Perfect time for you to buy your US real estate now to take advantage of this forecasted appreciation in US real estate prices.

Home Value Trend in the US
Home Value Trend in the US; Source: Zillow

What is the median and average purchase price of the houses in the US purchased by Mexicans?

The median purchase price for US real estate purchased by Mexicans between April 20-March 21 was $341,400, with an average purchase price of $407,500.

YearMedian Purchase PriceAverage Purchase Price
2010$134,400$214,700
2011$168,800$283,000
2012$200,000$396,200
2013$156,300$225,500
2014$141,100$224,100
2015$171,200$274,800
2016$176,500$266,200
2017$180,900$326,800
2018$189,100$208,800
2019$170,100$233,700
2020$249,900$403,500
2021$341,400$407,500
Source: National Association of Realtors (NAR)

Find the best real estate agent with international expertise

Connect with a local US real estate agent(s) with CIPS designation

Can Mexican citizens obtain a mortgage home loan in the USA?

Mexicans can get a mortgage in the United States without an established US credit history in the country. Last year, 33 percent of Mexico’s property buyers paid cash entirely. However, this is due to a lack of knowledge and understanding about mortgage financing alternatives accessible to purchasers from Mexico. You can take advantage of mortgage home loan financing available to Mexico citizens from US lenders (requiring no US credit history), irrespective of whether you are a recent immigrant (US Newcomer) buying a primary residence or a real estate investor looking to buy investment property in the US.

US Mortgages with no US credit history

US Mortgages for Foreign Nationals & Expats

Get pre-qualified for a US Mortgage as a foreign national buyer without US credit history

Please refer to our comprehensive blog on How to Obtain a US Mortgage for Foreign Nationals with No or thin US Credit History for a detailed step-by-step process.

Tax implications for Mexican buyer of US real estate

If you’re buying US real estate for a primary residence, there are no additional tax implications other than paying your property tax, like any other domestic buyer in the US.

However, if you are buying your US real estate as an investment property and plan to generate rental income through your investment, there are a few things to keep in mind.

Mexico tax obligations of US Investment Property

Under Mexican law, an individual resident may derive income from another country, subject to tax in that country. Accordingly, the individual may credit the foreign income tax paid against the Mexican income tax liability. However, the credit is limited to the lesser of (i) the amount of foreign tax paid with respect to foreign-source income taxable in Mexico and (ii) the amount of Mexican tax corresponding to that income. In addition, no credit is allowed for foreign taxes imposed on income that is exempt from Mexican taxation.

US tax obligations of US Investment Property

Mexican investors of US real estate must pay taxes on any income earned in the US; this means they will have to pay taxes on the income from their property (rental income, if any).

As a general rule, a non-US person who rents out their US home is subject to a 30% withholding tax imposed on the gross amount of each rental payment. However, the foreign owner must only pay tax on the net rental income on the US tax return, which means the non-US owner can take plenty of deductions (standard deductions in renting a property include interest deductions for mortgages, advertising costs, cleaning costs, property manager costs, etc.). The result could easily be that the foreign owner pays zero tax (or very little tax).

IRS (Internal Revenue Service) also states that foreign nationals must have either of the two – a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) to secure any tax treaty benefits. In addition, the non-US owner must obtain a US Individual Taxpayer ID Number (an “ITIN”) if one has not already been obtained.

Finally, the non-US owner must complete the IRS Form W-8ECI. The IRS Form W-8ECI is not completed unless the foreign owner gets an ITIN. After the owner takes the allowable deductions (including, for example, mortgage interest, homeowner’s association fees, and repairs and maintenance), it is possible (and common) that the foreign owner will owe $0 tax.

The foreign national is also required to timely file a 1040NR tax return. Filing for a 1040NR requires that foreign nationals have an ITIN.

In Conclusion

Buying property in the US is an excellent way to diversify your portfolio, especially if you’re looking for an investment that will grow steadily over time. So whether you are relocating from Mexico to the US (buying primary residence) or are just looking for an investment, buying US real estate is an excellent investment to start building equity or putting down roots in the US.

In this blog, we’ve covered some key points and things to consider when purchasing an American property as a Mexican to make the process go more smoothly.

US Mortgages with no US credit history

US Mortgages for Foreign Nationals & Expats

Get pre-qualified for a US Mortgage as a foreign national buyer without US credit history

Michele Lawrie, CREO - HomeAbroad
About the author:
Michele Lawrie is the Chief Real Estate Officer at HomeAbroad and has worked as a real estate professional for the past 15 years, helping domestic and foreign national clients navigate the home buying and selling process.
She is passionate about real estate and strives to educate read more...