Why U.S. Buyers Are Turning to Los Cabos Real Estate in 2025

As home prices, renovation costs, and rental rates continue to rise across the United States, more Americans are expanding their search beyond national borders. Los Cabos has become a standout destination for those seeking smarter real estate investments—offering lifestyle advantages, favourable exchange rates, and strong rental demand.

U.S. Housing Costs Are Driving Buyers Abroad

The Rising Cost of Homeownership

Across the U.S., buyers are facing record-high prices, rising mortgage rates, and limited inventory. The dream of owning a home feels increasingly out of reach for many, prompting growing interest in alternative markets. For those with cash in hand or access to financing, investing abroad offers an opportunity to stretch their dollar further and regain control over the buying process.

Construction Expenses Continue to Climb

According to the U.S. Commerce Department, single-family housing starts declined by 1.1% in early 2025. The slowdown is not just about interest rates—it’s also a reflection of surging construction costs. Materials like steel and concrete are significantly more expensive due to new tariffs and supply chain disruptions:

• Steel prices have risen 15% since Q4 2024
  
  

• Labour shortages are increasing project delays
  
  

• Tariffs and trade issues are pushing material prices higher
  
  

These factors are making new builds both more expensive and more time-consuming, which is causing some buyers to look toward markets where quality homes are readily available—like Los Cabos.

Renovations Aren’t Paying Off

The once-popular strategy of buying a fixer-upper to build equity is also being tested. 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 properties due to rising labour and material costs, permitting delays, and longer timelines.

In contrast, Los Cabos offers a growing inventory of modern condos and turnkey resort-style homes—ideal for buyers who want a move-in-ready investment or vacation property.

Rental Market Pressures Are Shifting Investor Strategy

U.S. Rental Properties Are Increasingly Competitive

With limited housing supply, national rents rose 3.6% year-over-year as of April 2025, according to Zillow. In major cities, bidding wars are no longer just for buyers—they’re happening among renters, too. This environment makes it harder for investors to find cash-flow-positive properties in the U.S.

Cabo Offers Stronger Rental Potential

In Los Cabos, lower entry costs and robust short-term rental demand provide investors with stronger earning potential. The region's year-round tourism, particularly in San José del Cabo and along the Corridor, means well-located homes can double as personal retreats and high-performing vacation rentals.

Canadian Buyers Are Feeling Similar Pressures

While this trend is especially strong among U.S. buyers, Canadian investors are also eyeing Los Cabos more seriously. Construction and renovation costs are rising in Canada as well, partly due to global supply chain issues and tariffs. Add in a favourable exchange rate and a long-standing tradition of wintering in warmer climates, and it’s no surprise that interest from the north remains strong.

Why Los Cabos Is Attracting International Buyers

Market Growth and Momentum

In Q1 2025, Los Cabos recorded $329.7 million USD in real estate sales—a 27.4% increase year-over-year. Average sale prices rose by over 50%, reflecting strong demand. Yet, the region still offers better value than most U.S. coastal cities.

More Lifestyle for Less

With a favourable exchange rate and lower cost of living, Americans can afford more in Los Cabos. Whether it’s a contemporary condo, a luxury villa, or a home in a gated resort community, the quality and lifestyle options often exceed what’s available in cities like San Diego, Austin, or Miami.

Ideal for Living and Investing

Many Cabo properties serve a dual purpose: a personal getaway and an income-generating asset. High tourism demand ensures strong short-term rental performance, while the quality of life attracts retirees, digital nomads, and families alike.

Why Now Is a Smart Time to Invest in Cabo

Timing matters. While the U.S. market cools under pressure from interest rates and inflation, Los Cabos remains a bright spot. Here’s why:

• The strong U.S. dollar boosts buying power
  
  

• Inventory is tightening, which may push prices higher
  
  

• Rental demand is strong and consistent
  
  

• Direct flights from major U.S. cities are expanding
  
  

• Tourism in Cabo is booming, increasing regional visibility
  
  

Buyers who act now may find better opportunities before prices rise or competition intensifies.

Financing Is Possible for Foreign Buyers

For Americans not planning an all-cash purchase, cross-border mortgage options like those offered by MoxiMortgage can make investing in Mexico more accessible. Buyers can qualify without Mexican residency, and loans follow familiar U.S. underwriting standards. These lenders also work directly with local professionals to simplify the closing process.

Find Your Dream Home in Paradise with Goldsmith Group Los Cabos

Whether you're seeking a vacation home, retirement property, or investment opportunity, our team at Goldsmith Group Los Cabos is here to help. We bring deep local expertise, trusted connections, and international experience to guide you through every step of buying property in Mexico.

Contact us today to learn more about available listings, cross-border financing, and how to make your Cabo real estate dreams a reality.