Why So Many People in Latin America Struggle to Find a Decent Home

Official data from the Housing Yearbook for Latin America and the Caribbean 2024 and the Inter-American Development Bank show a persistent housing crisis affecting nearly half of the region’s households.

The deficit is not uniform: it combines a shortage of homes (quantitative deficit) and a high number of existing homes in poor condition (qualitative deficit).

The average qualitative housing deficit across Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Panama, Peru, and the Dominican Republic stands at 23.8%.

This means nearly a quarter of homes in these countries are structurally inadequate, lack basic services, or are overcrowded. The quantitative deficit—homes that simply do not exist but are needed—averages 9.6% of the housing stock in these countries.

Country-level figures reveal the scale and diversity of the problem. Nicaragua faces one of the largest combined deficits in the region, with over 957,000 homes needed and 80% of the population living in homes that are not adequate or in optimal condition.

Costa Rica, though better off, still reports a shortage of more than 148,000 homes, and about 11% of its households lack adequate housing. Paraguay’s official deficit is 1.1 million homes, with 39% of urban and 50% of rural families living in inadequate conditions.

Labor informality is a major barrier to progress. In Guatemala, about 70% of the workforce is informal, making it difficult for most families to access mortgages or formal housing solutions.

Latin America’s Housing Crisis

The Dominican Republic faces a similar challenge, with 70% informality. This widespread informality limits the effectiveness of credit and subsidy programs.

Market dynamics further complicate the picture. In Costa Rica, 90% of new housing is built for only 30% of households, leaving most families priced out of the market. In Nicaragua, public and private investment meets only 25% of annual housing needs, causing the backlog to grow.

These figures show that Latin America’s housing deficit is a structural market and policy challenge, not just a social one. The crisis is driven by rapid urbanization, high informality, and a mismatch between what the market offers and what most people can afford.

Addressing it will require coordinated public and private investment, reforms to formalize labor, and new approaches to affordable housing finance.