Puerto Rico’s housing market stabilizing

House prices were up 2.41% during 2022

Puerto Rico’s housing market continues to stabilize. The seasonally-adjusted purchase-only house price index rose by a modest 2.41% in 2022 from a year earlier, following a year-on-year increase of 4.16% in 2021, using inflation-adjusted figures. Quarter-on-quarter, house prices increased 4.86% during the latest quarter.

A decade-long housing market downturn

The Puerto Rican housing market has suffered tremendously for most of the decade. The island has experienced a prolonged economic crisis, massive debt, high unemployment and continuing population loss. With US$70 billion in debt and US$50 billion in pension liabilities, Puerto Rico's bankruptcy filing in May 2017 was the biggest in the history of the United States. 

Then in recent years, the housing market showed some signs of recovery, despite the Covid-19 pandemic. During 2021, the total number of housing units sold surged 30.2% y-o-y to 13,289, following an 8.3% fall in 2020. However, housing demand has weakened again last year, with housing sales falling by 17.6% y-o-y to 8,318 units in the first three quarters of 2022.

Rents, rental yields: good rental yields in San Juan, at an average of 7.89%

Recent news. During 2022, Puerto Rico’s economy grew by about 4.8% from a year earlier, according to the International Monetary Fund (IMF), following a 1% growth in 2021 and a 3.9% contraction in 2020 caused by the pandemic as well as regular earthquakes. Before the Covid-19 pandemic, Puerto Rico’s economy has been contracting for most of the decade, except the 1.5% growth in 2019 and zero growth in 2012.

Puerto Rico’s economic growth is projected to slow again to 0.4% this year, based on IMF estimates.