A unique pattern evolved during the period of frontier settlement and increasing contact between native peasants and mestizo newcomers. Newcomers originally built houses and corrals on their own land, resulting in a dispersed settlement pattern. These rancheros, however, many of whom often started off as merchants or artisans, usually kept a second house in a nearby town ( pueblo ), especially if such a town served as an important market center or the administrative center ( cabecera ) of a municipio. A new generation of rancheros born in the Huasteca countryside often bought town houses where they could stay when they made numerous trips on horseback to attend to business or to political affairs.
In areas with a large indigenous population, many ranchos were founded close to native communities ( comunidades ). In such cases, cattle ranchers demarcated the boundaries of their ranchos by means of fences. Nevertheless, the rancho's main house might well become part of the outskirts of an expanding native settlement. This form of shared settlement was especially likely to occur if the rancho was located inside the original communal boundaries of native villages, whose poorer inhabitants ended up working for the rancheros. Such close proximity led to the virtual transformation of larger native villages into mestizo towns, as the owners of ranchos set up business and started building houses in existing native centers. In more remote areas, rancheros allowed both Spanish-speaking newcomers and native peasants to build huts and cultivate corn plots (milpas) on their privately owned land, in return for seasonal help in running the ranch. Although technically tenants or sharecroppers, such part-time rural laborers developed de facto settlements of their own within the boundaries of many larger ranchos. A ranchero's trusted employee (often a poor relative) might eventually establish his own rancho and obtain a separate land title. Overtime and part-time workers as well as poor relatives of such new, independent rancheros might in turn create additional rural settlements or hamlets ( rancherías ). Such hamlets—some of which could again evolve into quite large villages—did not look that different from subordinate settlements within the communal lands under the jurisdiction of native towns. Even in the late twentieth century both mestizo and indigenous rancherías lack street plans; the houses are strung out along the side of a hill or on both sides of a stream.