Nearly 80% of Indiana households priced out of current housing market

Indianapolis, Indiana – Nearly 80% of Indiana households are priced out of the housing market, according to data from a meeting of the Indiana Land Use Task Force held on Friday.

Since 2011, Indiana has experienced the fastest population increase in the Midwest, but the supply of new homes isn’t keeping up. The Indiana Association of Realtors reports that as a result, the state now need more than 30,000 housing units that don’t already exist.

“Housing policy has not kept up with the growth and demand in the market,” Indiana Association of Realtors’ official Mark Fisher said.

Fisher claims that Indiana has added two jobs for every one housing unit during the last 13 years.

“The supply isn’t keeping up, and financing challenges with interest rates increasing continue to provide affordability challenges,” Fisher said.

Others reinforced this.

“I think a lot of people would say we’re in a housing crisis right now,” Rick Wajda, the CEO of the Indiana Builders Association, said.

According to Wajda, the average cost of a new home in Indiana is now around $400,000. This means that a household would need to earn at least $120,000 annually in order to purchase a new home. This excludes the market for almost 2.1 million Hoosier households.

“Mortgage rates currently are pushing eight percent—if you go back two, two-and-a-half years ago, they were under three percent,” Wadja said. “It’s taking Hoosiers a lot more money to qualify for a home whether it’s new or on the existing market.”

County and municipal governments in Indiana will be able to apply for loans to help with residential infrastructure projects like roads and water lines starting later this year.

“If we have that infrastructure in place, we can help try to drive down the cost,” Wadja said.

HB 1005, which was passed during the previous session, will enable the loans. The measure also emphasizes rural development by mandating that villages and municipalities with less than 50,000 residents get at least 70% of the $75 million in financing.

“We’re looking at how you empower and enable smaller communities to think about housing as a talent attraction/retention tool to really develop a housing strategy that meets their economic development strategy,” Fisher said.

According to Wadja, the Indiana Finance Authority will probably unveil an application process later this year, and counties and municipalities that submit might begin receiving funding by the start of 2024.