New Mexico Homebuyers Often Use Land Contracts Instead of Mortgages to Purchase Smaller, Older Homes

Fact Sheet March 11, 2026

Overview

Thousands of New Mexico homeowners have turned to land contracts in the past 20 years as an alternative to mortgages for financing their homes. Unlike mortgages, land contracts—often referred to as “real estate contracts” in New Mexico—do not involve a bank or lender, but instead rely on the seller extending credit directly to the homebuyer. For homebuyers who might not meet qualifications for obtaining a mortgage (such as adequate credit history or sizeable down payment), land contracts provide access to a form of credit with fewer barriers to entry.

However, while many buyers report positive experiences with land contracts, these contracts also come with risks.¹ Like many states, New Mexico has no state laws that specifically protect land contract buyers.² Additionally, land contract buyers do not obtain full ownership rights at the time of purchase: The title to the property is transferred only after the buyer makes a final payment. This delay creates ambiguity about responsibilities such as property taxes, insurance, and maintenance, as well as general uncertainty about the security of the buyer’s investment. In New Mexico, sellers have typically sold homes via land contracts in dense urban centers, such as the Albuquerque metropolitan area.

For this fact sheet, researchers from The Pew Charitable Trusts analyzed property records data from 2005 to 2024 to shed light on the land contract market in New Mexico.

New Mexico’s land contract market

Land contracts are common in New Mexico. From 2005 to 2024, county governments in New Mexico recorded 27,132 land contracts—the eighth-most among all states, even though New Mexico ranks 36th in population. The number of land contract recordings peaked in New Mexico in 2021.

Land contracts are most common in New Mexico’s urban areas. Bernalillo County, which contains Albuquerque, recorded 12,596 land contracts over 20 years, 46% of all contracts recorded in the state. Land contracts were also prevalent in adjacent counties, such as Valencia, home to Los Lunas (3,339 contracts registered from 2005 to 2024), and Sandoval, where the town of Bernalillo is located (2,123 contracts). (See Figure 2.)

Note: No land contract data was available for counties shown in gray.

Source: ATTOM Data Solutions, *Property Data*, 2005-24

© 2026 The Pew Charitable Trusts View image View image

Land contracts make up a larger share of home sales in New Mexico’s urban areas. Valencia County recorded 3,339 residential land contracts over 20 years, 13% of all home sales in the county. In contrast, land contracts make up only 4.6% of all home sales for the state. Land contracts made up a larger-than-average share of home sales in adjacent, similarly urban counties, such as Torrance (28.5% of county home sales) and Socorro (14.1% of county home sales). (See Figure 3.)

Land contracts are mostly used to purchase residential property. About 75% of New Mexico land contracts were used to purchase homes from 2005 to 2024. The remainder were used to purchase commercial or agricultural properties or vacant land.

Land contracts in New Mexico are primarily used to purchase low-cost properties. The median real sale price of a land contract in New Mexico was about $174,000 (inflation-adjusted to 2024 dollars), which is less than the median sale price of single-family homes over the same time period of around $203,000.

Most land contracts in New Mexico are executed between individuals. More than 74% of the land contracts registered in New Mexico from 2005 to 2024 involved one person selling a home to another person. About 18% involved a corporate entity selling to an individual buyer, with the balance involving a corporate entity selling to a corporate buyer.

Land contracts are often used to finance smaller, older homes. The median year of construction for a home purchased with a land contract in New Mexico was 1980, older than the statewide median of 1988. The typical home purchased with a land contract was 1,524 square feet, compared with 1,718 square feet for the typical home sold in New Mexico from 2005 to 2024.

Land contracts are more expensive than mortgages. Land contracts in New Mexico had a median interest rate of 7% from 2005 to 2024, compared with 5.9% for mortgages. However, down payments were smaller: 5.6% of the total sales price for residential land contracts, compared with 7.9% for mortgage-financed home sales. For some land contract buyers, the smaller down payment is part of the appeal of a land contract.