Affordable Entry-Level Lending:

During 2010, INFONAVIT formalized 475,072 mortgages, a 6.2 percent increase when compared to 2009. As a result of a positive and growing housing industry, INFONAVIT reached its 2010 lending goal of 475,000 credits. At the same time, INFONAVIT’s non-performing loan (NPL) rate remained stable for the year at 5.1 percent, on target with its goal of 5.0 percent. This is due to the institute’s “Garantia INFONAVIT” program where subscribers who have lost their jobs and/or purchasing power can gain access to mortgage restructuring programs.

FOVISSSTE, formalized 91,050 mortgages during the year, in line with its annual goal of 90,000 to 100,000 mortgages, nonetheless a 9.0 percent decrease when compared to 2009 performance.

As a result of the financial crisis, the homebuilding industry went into a consolidation phase, where homebuilders with more solid financial positions and specialized construction technology were able to strengthen their positions in the market, both by absorbing projects that were left without financing sources for their completion, and by the fact that the dynamics of the market favor the affordable entry-level segment, where the price obliges builders to generate economies of scale in order to be competitive.

According to Mexico’s Housing Comission (CONAVI) database, 2007 was the year with the greatest number of homebuilders with registered projects, with 1,762, and since that time, the number has dropped to approximately 1,417 in 2010. The consolidation occurred mainly among medium and large sized companies: between 2008 and 2010, the number of builders that registered more than 1,000 housing units fell from 14 percent to 3 percent; also, the companies that registered between 100 and 500 units fell from 29 percent to 22 percent in the same period.