WHAT’S NEXT FOR THE CENTRAL INDIANA HOUSING MARKET? ECONOMIST’S PREDICTIONS FOR 2023

by Christy Heitger-Ewing

What’s next for the Indiana housing market? Dr. Steven Byers, senior economist with the Common Sense Institute (CSI) gives us a glimpse into the near future and what it means for hopeful homebuyers.

We live in an incredible area! Indiana homeowners can find a wealth of opportunities for socialization, recreation, culture, culinary exploration, art, and connection. Many Central Indiana cities are making a solid investment that will serve them well now and into the future.

We are seeing a decline in permitting for new builds. The monthly average for housing permits dropped 37% in 2023. Dr. Byers says, “If this continues going forward, new home construction will drop off and will result in supply issues.” Based on comprehensive research published by CSI, it is likely that this will become a stark reality for those wishing to buy a home.

Mortgage rates have certainly been on the rise since a 2020 low of about 2.68%. In 2023, we saw them exceeding 7%. There is some downward movement, but Dr. Byers expects that it won’t be enough to make a difference for millions of buyers. “This,” says Dr. Byers, “poses significant challenges to home affordability.”

The Indiana housing market is undoubtedly an attractive investment – but that comes at a high cost. Homebuyers face the frustration of finding a suitable home for their needs and their budget, then being unable to compete when it comes to bidding. What’s the answer? There isn’t one. Keyword: one. Solutions must be multi-pronged, address all the complexities involved in this issue, and involve every stakeholder, from buyers to owners to investors to businesses to policymakers. It starts with us. Join the conversation at buildindianaroots.com.