Current Buyer Sentiments, Housing Affordability Contribute to Low Permit Numbers
INDIANAPOLIS (May 20, 2022) – Rising interest rates, overall inflation and a volatile stock market has led the Builder’s Association of Greater Indianapolis (BAGI) to see a 24% decrease in single-family building permits in Central Indiana’s nine-county area from last year’s numbers.
801 permits were issued last month compared to 992 in April 2021.
Jeff Langston, Owner of Old Town Design Group, believes that these challenges have led to a more serious issue of affordability, which is a large contributing factor to the slowdown in permits issued.
“The ‘under $400,000’ home market represents almost 75% of the market,” Langston said. “The cost of housing has now priced out a section of the market. This price range is driven by cost of payment and with increased rates, coupled with increased costs, the most susceptible market has seen the impact first.”
Despite these challenges, the home service industry remains strong and hopeful. Steve Lains, CEO of BAGI, has been watching and discussing permit numbers with local builders and is impressed by the ways they’re overcoming both new and old trials to build homes for families and catch up to normal run rates.
Lains encourages consumers to remain positive and understand that the normalization of activity will allow the labor force and supply chain to breathe and eventually get back up to speed.
Permit Breakdown by County:
|County||2021 Permits (Jan – Apr)||2022 Permits (Jan – Apr)|
The Builders Association of Greater Indianapolis is a professional trade association representing residential homebuilders, associates, and remodelers. For more information, call 317-236-6330; or visit www.BAGI.com/permits/ for permits numbers from 2000-2022.