Housing, the main non-financial asset of Mexican households

Housing is the main asset for five out of 10 households in Mexico (54.4%) reveals the National Survey on Household Finances (ENFIH 2019) conducted for the first time by the Bank of Mexico and the National Institute of Statistics and Geography ( Inegi).

Of the households belonging to the first quintile, which corresponds to people with the lowest income, 68% own their main home and this proportion rises to 73% for the fifth quintile, which is that of people with the highest income. This means that the main non-financial asset of Mexican families is their home.

According to the results of the survey conducted among 17,000 households throughout the country, the Afores are the main financial asset throughout the entire income distribution.

This is assumed by identifying that retirement savings accounts and / or afore represent between 63 and 93% of total financial assets.

The survey, whose main objective is to collect information on the balance sheet of the country’s households, reveals that financial assets tend to be concentrated mainly among households with higher incomes. It is in this segment where liabilities are also concentrated.

According to the results, the average value of the debt of 5% of households with the highest income is six times higher than that of 40% of households with the lowest income.

Almost 60% of the households in the country say they have no debts, while two out of every three households responded that their income is only enough for what is necessary.

The type of debt most frequently contracted by households in Mexico is through a bank and / or departmental credit card. Specifically, 53.8% of the debts contracted by families were acquired via credit cards, payroll or personal loans.

Only 11.6% of families with debt are paying some type of mortgage credit.

Vehicles, contingencies and cards

In the detail of the survey, it is observed that vehicle ownership occurs much more in households with higher incomes.

Thus, 82% of households in the highest quintile reported having vehicles, against 25% of families with the lowest income.

The proportion of households with debt through a credit card increases as household income increases, a trend similar to that which occurs with credit to purchase vehicles.

Saving in term instruments or investment funds is used mainly by households with higher incomes.

In the event of an unforeseen event, 64.9% of households would request a loan from their relatives or acquaintances; 35.5% would sell or pawn some good 21% would take an advance on their salary and 19.7% would use their savings.

The wealth profile

The average wealth of the richest households, defined as the sum of financial and non-financial assets minus liabilities, is seven times that of 20% of the lowest-income households.

According to the results, 5% of the households with the highest income in the country have an average net wealth of 3.02 million pesos, while 20% with the lowest income have an average net wealth of 425,000 pesos.

Another finding of the survey is that the net wealth of households is higher when the educational level of the members is higher, as well as their age.

Thus, the median net wealth of households in which the person of reference has a postgraduate degree is 921,000 pesos, while households where the person of reference has no schooling, the figure is 203,000 pesos.

Regarding age, the results suggest that when the reference person is older, it partly reflects a process of wealth accumulation.

The survey was conducted between October 7 and November 29, 2019 in 17,000 homes throughout the national territory.

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Reference-www.eleconomista.com.mx

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