Low incomes, high home prices still make owning a home challenging
Housing affordability in Puerto Rico improves slightly, but supply remains a challenge.
The Affordable Housing Index, compiled by Estudios Técnicos Inc. (ETI), shows that homeownership in Puerto Rico remains difficult despite a moderate drop in mortgage interest rates in the third quarter of 2024.
Leslie Adames, director of economic analysis and policy at ETI, said the index rose from 56% to 61%, indicating a slight improvement in affordability. However, families still earn only 61% of the income necessary to qualify for a mortgage, making home purchases increasingly challenging.
The average home price in Puerto Rico rose by 15% in 2024, reaching $221,824, compared to $193,409 in 2023, according to data from the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF, in Spanish).
Prices for new homes surged by 20%, reaching $351,407, while used home prices increased by 14%, averaging $211,933.
At the same time, home sales declined by 9%, with 7,424 units sold in the first nine months of 2024, 764 fewer than in 2023.
“Although the 30-year fixed mortgage interest rate decreased from 7.06% in May to 6.18% in September, it is still high compared to the pre-pandemic average of 4.04%. In addition, home prices continue to rise,” Adames said.
The market also faces inflation in construction materials, which could worsen due to new tariffs on steel and aluminum imports.
“In addition, the shortage of affordable housing and the lower number of new residential developments at affordable prices make the situation even more difficult, limiting opportunities for access to housing for certain segments of the population,” Adames said.
