As home prices, renovation expenses, and rental rates continue to climb across the United States, more Americans are expanding their horizons and looking abroad for smarter real estate investments. Increasingly, their eyes are turning south, to regions like Los Cabos.
Backed by a strong U.S. dollar, a thriving real estate market, and year-round appeal for both personal use and vacation rental income, Los Cabos is becoming a top choice for American buyers seeking more value, flexibility, and lifestyle benefits than they can find back home.
U.S. Housing Costs Are Climbing — and So Is Buyer Fatigue
For many U.S. residents, the dream of owning a home feels increasingly out of reach. Across the country, buyers are facing record-high listing prices, limited inventory, and rising mortgage rates — all at a time when the cost of living continues to climb. These pressures are leading to widespread buyer fatigue and a growing interest in alternative markets where the dollar can go further and the buying process feels more accessible.
Construction Costs Are at a High
According to the U.S. Commerce Department, single-family housing declined by 1.1% in early 2025, a reflection of the broader slowdown in new home construction. This trend isn’t just due to interest rates—it’s also being driven by sharply rising costs for key building materials. New tariffs on imported steel, aluminum, and other supplies have pushed prices up significantly.
For example, steel prices in North America have risen 15% since Q4 2024, and concrete costs are up in many urban areas due to both trade policy and supply chain disruptions. Add in labor shortages in the construction trades, and the result is a more expensive — and slower — build cycle. Buyers are paying the price, either in the form of higher sticker prices or lengthy delays.
Rents Are on the Rise
With fewer new homes entering the market, rental inventory remains tight — and rents continue to rise in response. According to Zillow, national average rents rose 3.6% year-over-year as of April 2025, with cities like Phoenix, Denver, and Charlotte experiencing even sharper increases.
In desirable metro areas, many renters are finding themselves paying more for less, with bidding wars now common even for long-term rentals. For real estate investors, this environment is making it more difficult to acquire rental properties at a price point that yields a healthy return. Properties with strong rental potential are rare and highly competitive, often going over asking.
This has prompted some investors to look abroad — toward markets like Los Cabos, where rental demand is strong, entry costs are often lower, and short-term rentals offer higher earning potential.
Renovating Is No Longer Cost-Effective
The classic American strategy of buying a fixer-upper to build equity is also being tested in today’s market. Contractor availability is down, timelines are stretched, and costs are up across the board.
A recent Redfin report shows that the average sale price of a fixer-upper in the U.S. has dropped by over 7%, as buyers shy away from renovation-heavy projects that once promised big returns. Permitting delays, labor bottlenecks, and inflated costs for everything from kitchen cabinets to roofing materials are cutting into profits — and patience.
Today, many buyers want turnkey homes or low-maintenance investment properties that are ready to go — a demand Los Cabos is well positioned to meet with its growing inventory of modern condos and fully finished resort-style homes.
Are Canadian Buyers Affected?
Canadian buyers are experiencing some of the same pressures as their U.S. counterparts when it comes to rising construction and renovation costs, partly due to tariffs and supply chain issues impacting building materials. While these factors make the Canadian housing market more challenging, they also motivate many Canadians to explore more affordable and flexible options in Baja California Sur and beyond.
With convenient direct flights and a strong tradition of spending winters in warmer climates, Canadian interest in Cabo remains steady. The favorable exchange rate and lower overall costs mean Canadians can enjoy luxury properties and lifestyle benefits without the high price tags seen at home.
Why Buyers Are Turning to Los Cabos
A Market with Strong Growth
In the first quarter of 2025, the Los Cabos real estate market recorded $329.7 million USD in sales volume — a 27.4% year-over-year increase. The average home sale price also jumped by over 50%, reflecting healthy demand and rising value. Despite this growth, Los Cabos still offers greater affordability than most U.S. coastal markets.
Get More for Your Money
With a favorable exchange rate and lower cost of living, U.S. buyers are finding that their dollar stretches significantly further in Cabo. Whether you’re looking for a modern condo, a high-end villa, or a home in a resort community, Los Cabos offers options that would be cost-prohibitive in cities like Los Angeles, San Diego, Miami, or Austin.
A Dual-Purpose Investment
Cabo homes can serve as both a personal retreat and an income-producing asset. Thanks to the region’s popularity with tourists, short-term rentals remain in high demand — particularly during high season and major events. That flexibility is drawing investors looking to diversify and generate returns in a stable, scenic environment.
Why Now Is the Time to Buy in Los Cabos
With the U.S. housing market cooling due to elevated interest rates, tighter lending, and inflationary pressures, many buyers are waiting — or walking away from deals altogether. Meanwhile, Los Cabos remains a bright spot for real estate investment.
Here’s why timing matters:
- U.S. dollar strength is boosting purchasing power abroad.
- Inventory in Cabo is tightening, which could push prices higher in the near future.
- Rental demand remains strong, especially in tourist-friendly areas like San José del Cabo and the Corridor.
- Air connectivity is expanding, with more direct flights from U.S. hubs to SJC International Airport.
- Los Cabos’ tourism industry is booming, increasing visibility and demand in the region.
For Americans with cash or access to financing, Cabo offers a unique opportunity to buy in a desirable market before prices rise further or competition intensifies.
Considering Financing? Cross-Border Mortgage Solutions Exist
For non-Mexican citizens interested in Los Cabos real estate but not planning an all-cash purchase, cross-border mortgage options can help bridge the gap. One such provider is MoxiMortgage, a U.S.-based lender that specializes in financing property purchases in Mexico for American citizens.
Buyers can apply for loans without needing Mexican residency, and the process is handled through familiar U.S. underwriting standards. MoxiMortgage works directly with local notarios and real estate professionals, helping streamline what can otherwise feel like a complex cross-border transaction.
While not required for every buyer, financing options like these can make it easier to move forward on your investment in paradise — especially as prices begin to climb and inventory tightens.
Ready to Explore Cabo Real Estate?
Whether you’re looking for a second home, a future retirement spot, or a high-performing vacation rental, Los Cabos is one of the most attractive places to invest right now.
At Century 21 Paradise Properties, we’ve helped countless buyers navigate the journey of owning property in Mexico with confidence and ease. Our team has the local expertise, international experience, and trusted connections to guide you every step of the way — from your first questions to closing day and beyond.
Contact us today to explore available listings, get expert advice on the local market, and take the first step toward owning your dream home in Cabo.