Indiana Housing Market Struggles With Affordability, Demand
By Joey Graham
Indiana News Service
INDIANAPOLIS — The spring home-selling season is here, but in some parts of Indiana, homeowners seem reluctant to put their houses on the market. The inventory of homes for sale in Indianapolis is down 20% over this time last year, according to the Metropolitan Indianapolis Board of Realtors or “MIBOR.”. But statewide, home-sale inventory is up almost 28%.
Prospective sellers face higher interest rates and fewer places they can afford when their home sells.
Greg Cooper, a broker with Compass Real Estate of Indiana, said the market is sending mixed signals.
“There are tremendous numbers of terrible housing headlines across the country, but the reality in Indiana, even if it’s modest or if it’s significant, the reality is we still have a deficit of homes for people to buy, values are still going up — despite the fact that home mortgage rates are more than double what they were a year ago,” he said.
The same factors may also keep more people renting this year. The rental-housing market in Indiana has grown by double-digits in the past two years. The National Low-Income Housing Alliance estimates the state needs 135,000 more houses or apartments at prices that low-income renters can afford.
Some current home-sale listings are from owners with buyer’s remorse, who fear they jumped too quickly in the aggressive market that sprang up during the pandemic. Cooper said a lot has changed in the last three years.
“Because we don’t live exactly the same way that we did during quarantine and pandemic,” he said. “So, there are people who are going back into the marketplace. And these are the ones who are really struggling because they had mortgages that were 3% or 3.25%, or whatever. And now, they’re looking at 7 to 7.5%. So, those people have a ton of regrets.”
The unprecedented home-buying fever started to cool in August. Cooper said the craze left some homeowners with repair bills for problems they missed in the crush, when they agreed to skip home inspections. The Federal Reserve Board meets March 22nd to decide whether to raise interest rates again.