According to data compiled by a California based moving service provider, Mexico is the most popular destination for United States citizens who make the decision to move abroad today.

Last year in 2021, a total of 16,022 U.S. citizens moved to Mexico as temporary or permanent residents, a figure 38% higher than in 2019 when the coronavirus pandemic had not yet had an impact on people’s decisions about moving abroad.

To put the 16,022 figure into perspective, it outnumbers those who moved to the United Kingdom (14,626), Canada (11,955) and Australia (7,948) which are the second, third and fourth most popular destinations.

The data provided by the company also shows that 10,594 Americans moved to Mexico in just the first seven months of this year, meaning that if migration to Mexico were to continue at its current pace, the number of new U.S. expats in Mexico at year’s end could exceed 18,000, a new five-year high.

Why Mexico?

Mexico was named the best country for expats in a 2022 report from InterNations. Although Mexico’s economy has yet to recover to pre-pandemic levels, the country is home to the second-largest economy in Latin America. It ranked second in the personal finance index in the InterNations report. 

According to purchasing power parities data available on The Organisation for Economic Co-operation and Development, Mexico’s purchasing power parity is 10.04 pesos per US dollar, meaning that a dollar should buy what 10 pesos buy. But the current market exchange rate is approximately 20 pesos per USD, meaning that a dollar buys twice as much in Mexico as it does in the US.

Skyrocketing housing prices today are fueling an increasing percentage of the migration south of the border, even while many of them still actively work in the U.S. with Tijuana a popular destination. The border city offers San Diego residents an attractive option where they can get a lot more for their money in the south of the border housing market.

Gabriele Zarate is a 38-year-old Chilean-American who made the decision to move to Tijuana where he crosses over to work in San Diego as an English teacher during the day and returns home in the evening to Mexico.

“One of the biggest reasons is the cost of living in Tijuana. It’s significantly cheaper than in California,” Zarate said.

Also, “I love Mexican people and food,” he added.

His neighbor and fellow English teacher Mike Rachfal also made the move from San Diego, where he used to pay US$1,275 per month to rent a studio.

“Here it’s less than half that,” the 36-year-old said.

Tijuana is one of the cities with the fastest-rising real estate prices in Mexico — up 10.7 percent in the first quarter of 2022 when compared to a year earlier, according to data from the state-owned Federal Mortgage Society.

About 1.6 million U.S. citizens are estimated to live in Mexico, where they can stay for up to six months with a tourist visa, or apply for residency.

Digital Nomads

Along with the lifestyle and cost of living, the relatively relaxed immigration rules are part of the appeal for remote workers flocking to Mexico where a recent expat survey found that Mexico is “the world’s best country for expats” with a “happiness level” of 91%.

Brian McDonald, a 34-year-old software developer from Oklahoma, has spent more than a year in Mexico, lured by its budding technology scene but also its very friendly culture.

Office-sharing company WeWork has seen a “significant influx of digital nomads” in districts of Mexico City popular with foreigners, company spokeswoman Cristina Sancen said.

“Mexico City has an incomparable climate. For foreigners, it’s definitely a cheaper city. It’s also a cosmopolitan and highly developed city with start-ups and corporations,” she added.

The influx of foreigners has divided opinion among the local residents along Mexico’s northern cities where many of them see the new expat influx as one of the reasons behind gentrification and rising rents.

The cheaper rents can be a sensitive subject in Mexico, where wages are much lower than in the U.S., and as the number of U.S. citizens moving south of the border increases, so do prices.

Rents change from pesos to dollars

Amid all the bustling construction activity in Tijuana, new apartment buildings are springing up in different areas of town with “For Sale” signs in English and prices in dollars.

Rents in Tijuana have doubled over the past decade, and the price of land has tripled, said Maricarmen Castellanos, founder and director of Probien, a Tijuana-based luxury real estate firm.

While she gets many inquiries from Americans about buying vacation homes in the beachfront communities of Ensenada and Rosarito, south of Tijuana, the vast majority of her American clients today are looking to rent, not buy.

While the new construction is creating opportunities in certain job sectors in many of the northern border cities of Mexico, many are left out of the economic boom created by the phenomena.

The increased costs of housing / living is pushing many of them to live further out from their old neighborhoods where they can no longer afford to live with some of them having to relocate further south to regions with lower costs of living.

The new reality?

Carlos Herrera, a Tijuana real estate agent we spoke with commented that the city “was built on migration”, pointing to the fact that “in addition to the growing number of expats now living here, most families in Tijuana today can trace their recent roots elsewhere, to other parts of Mexico and Central America.”

“People moved north here to the border, seeking a better life over the last several decades and some continued on, migrating further north to the U.S. and Canada.”

Carlos moved here from Mazatlán after he was laid off from his job at a newspaper five years ago, a victim of the growing move towards digital news.

“The combination of the global economy and the internet has created a new playing field with a new set of rules; some will now start moving back south, looking for a better life and new opportunities in areas they wouldn’t have considered just 10 or 15 years ago.”

“People tend to resist change but it’s unavoidable,” he added. “It’s life today in the 21st century. We just have to be willing to adapt and go where the new opportunities are…”