Mortgages looking up.

Mexico's mortgage market appears to have recovered quite well from a collapse prompted by the peso crisis of 1994-95. Economic stability has revived the market and helped lay the foundation for a growing mortgage-backed securities market similar to Fannie Mae in the United States, The Wall Street Journal reported.

The Wall Street Journal extolled the boom in affordable housing, citing the federal government's renewed activity in home lending as well as the success of low-cost mortgage providers such as Hipotecaria Su Casita.

Development groups planned to finish some 450,000 low-cost homes by the end of 2004, doubling housing construction from four years before, the Journal reported. Another promising sign was that construction companies accounted for all the initial public offerings on the Bolsa last year.

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The New York Times cited President Fox's stated goal of increasing the number of mortgages each year of his term to 750,000 in 2006 and reported that he "is on track to reach his goal."

The Times said "the vigor in the (mortgage) industry is finally attracting commercial banks, which abandoned the mortgage business in 1995." Preliminary data from the Banco de Mexico indicate that the commercial banking sector made roughly 19 billion pesos worth of loans in the housing sector in 2004.

The Financial Times noted that Mexico's nascent market for mortgage-backed securities passed a landmark in early January with the first-ever trade on the secondary market.

The FT reported that the trade--though only for 10 million pesos--"will help to reassure investors about liquidity in the market." The article also quoted a spokesman for Mexico's Federal Mortgage Society saying the growth of the secondary market is "fundamental for our country, to finance successfully the expected growth in housing demand over the next five years."