Central Indiana Homebuilding Surges: YTD Permits Up 27% as Demand Outpaces Supply

INDIANAPOLIS (August 20, 2024)—The Builders Association of Greater Indianapolis (BAGI) just released its July permit breakdown. Permits are up 27% year over year, and the demand for housing remains strong.

The Builders Association of Greater Indianapolis (BAGI) reports increased single-family home permits for Central Indiana for another month. While interest rates are not decreasing and home price increases remain, the demand remains high.

Here’s why that matters:

• National 30-Year Fixed Rate: 6.85%
• National Unemployment Rate: 4.1% | Indiana’s Unemployment Rate: 3.8%
• National Home Prices: Increase by 5.8% in 2024
• Mortgage Delinquency Rates: 3.97% in July 2024

Steve Lains, CEO of BAGI, said, “Permit numbers in Central Indiana are indicative of a healthy market. Mortgage costs are still low in historical comparison. There’s record high home equity and a tight labor market. We’ve seen a smaller percentage increase in home prices in the past two years and a steady (although higher than we’d like) interest rate. These factors, in addition to the housing demand, point to a strong, balanced market.”

The housing supply remains low. Lains said, “Low, locked-in interest rates have locked people into their homes, creating less existing inventory on the market. With delinquency rates at historical lows, there are few distressed property sales. The only answer to demand currently is new home construction, which is why it continues to grow steadily.”

Additionally, the most significant number of young adults between the ages of 25 and 34 are looking to purchase housing. “This only reiterates demand is outpacing supply,” said Lains. “Unfortunately, this makes it more difficult for this demographic to purchase a home as availability and affordability become points of contention.”