‘A pipe dream’: New report paints bleak picture for New Mexicans looking to buy homes

When Bekah Casey and her fiance, Max Jimenez, tried to buy a house two years ago, they quickly realized it was impossible.

In Albuquerque, where they live, all the homes for sale and even the apartments for rent were “ridiculously overpriced,” Casey said. “We just straight up couldn’t afford it.”

After being denied by two rentals for not meeting income requirements, the couple, who both work full-time as private security guards, decided to buy a modular home.

“A lot of people think of a manufactured home and they think of a trailer park grandma, which I had definitely thought of at first,” Casey said. “But when we went and looked through them, a lot of them are very nice and very beautiful.”

At almost 1,200 square feet, their manufactured house has three bedrooms and two bathrooms, a full set of appliances, a stainless steel sink, a garden tub, a mailbox, a driveway and enough space for Casey’s 6-year-old son. Most importantly, it cost them $117,000.

Still, Casey, 25, said she and Jimenez, 22, felt a sense of disappointment about not being able to afford a traditional house, with a neighborhood and a garden and a plot of their own land.

“A house is far more secure,” she said. “It’s something that you can have forever and long term. But for us, at the very least, we owned something that we could live in.”

Many would-be first-time homebuyers across the state and the country like Casey and Jimenez are facing the reality that traditional homeownership may not be possible for them the same way it was for their parents and grandparents.

Only 13.5% of renters in New Mexico can afford to buy a home at the median price, according to a new report from the New Mexico Mortgage Finance Authority.

“We’re always told owning a home is the American dream. But the reality is, for a lot of people now, at best, it would be a pipe dream,” said Dan Coleman, director of the New Mexico Association of Realtors.

Coleman sells homes in Roswell, where he estimates he sees around half the number of buyers he did five years ago. The number of homes on the market has shrunk by around two-thirds, he said, because people can’t afford to move.

First-time buyers priced out of the market may turn to manufactured housing, as Casey and Jimenez did. Mobile or manufactured homes make up 15% of New Mexico’s housing stock, compared with about 5% nationwide, according to the report.

More often, first-time buyers combine incomes — Coleman said some of his clients looking for a first house work multiple jobs, but most are couples or friends buying a house together as roommates.

“Housing affordability is not just a New Mexico problem — it’s a national crisis,” Coleman said.

Since 2019, the median price of a home in New Mexico shot up almost 60%, from $216,500 to $345,000, while the median income for a household in the state rose by only about 26% in the last five years to $62,125, according to the MFA.

To meet the U.S. Department of Housing and Urban Development’s definition of “affordable housing,” total housing costs — mortgage, rent, utilities, insurance — must not exceed 30% of someone’s monthly income.

In keeping with this rule, a household must have an annual income of $108,935 to afford an estimated median-price mortgage of $2,723, the report said.

We ended up here mostly by not building enough homes, said Robyn Powell, director of policy and planning at the state’s Mortgage Finance Authority, also known as Housing New Mexico.

“It’s a supply-side issue that’s been a decade or more in the making at this point,” Powell said. “As a nation, we just haven’t kept up pace with the housing stock.”

Twenty years ago, about 20% of all new homes built in Albuquerque were smaller, more affordable properties — “starter homes” — compared with around 4% of homes built now, according to Mike Loftin, CEO of Homewise, a Santa Fe-based housing nonprofit.

“No one’s building starter homes anymore. Everyone’s building more expensive homes for the move upmarket,” Loftin said. “We’ve got to get back to building homes that a working-class family renting can afford to buy.”

First-time homebuyers, who tend to be younger, are suffering the most in this steeply priced housing market, said Reilly White, professor of finance at the University of New Mexico.

Last year, the median age of a first-time homebuyer in the U.S. was 38, the highest number recorded since the National Association of Realtors began collecting data in 1981. That year, the median age was 29.

The median age for all homebuyers also reached an all-time high of 56 years old, up from age 31 in 1981.

“It’s an amazingly different demographic of people buying and selling homes,” White said.

For those who are shut out of homeownership, not being able to afford a home creates deep, generational inequities in wealth, White said. Research shows homeownership is also associated with better health and higher life expectancies.

In New Mexico, housing inequality persists along racial and ethnic lines, according to the report. Although Hispanic residents make up about 48% of the state’s population, they represent only around 33% of homeowners. Black and Native American households are also underrepresented among homeowners.

Though aid groups across the state offer fixed-rate mortgages and down payment assistance, White says the real solution for the housing crisis may require bold, coordinated action and policy change.

“I think we have a very frustrated generation of people who are younger, out of college, in the working space for some years, that eventually will achieve political power,” White said. “And they’ll use that power to make cities more livable places.”