(FORTUNE Magazine) – A Mexican housing shortage has gringo homebuilders looking to spackle stucco south of the Rio Grande. It could be the hottest market around. Columbia, Maryland, builder Ryland Group has set up a joint venture with a local contractor in Guadalajara. Kaufman & Broad of Los Angeles is checking out the market from a new office in Mexico City. Houston's Centex, the U.S.'s largest builder of single-family detached homes, is scouting all over the country. The possibilities are huge. Kaufman & Broad's spokesman Bernard Sandalow cites 600,000 potential house hunters in Mexico City alone. Centex executive vice president Richard Sconyers thinks a booming economy and young population make Mexico ''a market fixing to explode.'' Ryland claims its steel-frame technology cuts building time to 90 days, a fifth of the time Mexican builders using poured concrete need. Alas, all is not oro. There is no formal mortgage banking system. Homebuyers pay cash or get a short-term loan with a big down payment and high interest rate. But the builders are talking to Mexican bankers about developing a mortgage market. And NAFTA? Kaufman & Broad's Sandalow says passage of the agreement would be a plus, but ''we don't think our success will ride on its success.''