INDIANAPOLIS (September 24, 2024) — The Builders Association of Greater Indianapolis (BAGI) recently released its August permit report, showing a 20% year-over-year increase for the month of August in housing permits. While inflationary pressures have eased, the housing market remains robust, driven by strong demand for new homes.
Last week, the Federal Reserve dropped interest rates by a half-point. Many had anticipated a quarter and were surprised by the .5% decrease. As housing prices in Central Indiana remain steady, reflecting the nationwide trend of persistent demand outpacing supply, BAGI is anticipating the interest rate decrease will encourage some homeowners to dive back into the market.
Here’s why this matters:
National 30-Year Fixed Rate: 6.845%
National Unemployment Rate: 4.2% | Indiana’s Unemployment Rate: 4.2%
National Home Prices: Increased by 5.4% in 2024 (a slow-down from May’s 5.9%)
Mortgage Delinquency Rates: 3.97% (second quarter 2024)
Steve Lains, CEO of BAGI, shared optimism about the local market: “The recent permit increases in Central Indiana signal a healthy housing market. Although home prices remain high, inflationary pressures are easing, and that’s a positive sign for builders and buyers. Interest rates are higher than many would prefer even amidst this recent decrease, but with inflation being tamed, we expect to see a stable, resilient housing market moving forward.”
The limited supply of existing homes continues to drive the demand for new construction. “Many homeowners remain locked into low mortgage rates, reducing available inventory. This has created a need for new homes, which is why construction continues to surge in Central Indiana,” Lains added.
A growing population of young adults aged 25 to 34 seeking to purchase homes further underscores the strong demand in the region. “While we’re seeing more affordability concerns for this group, particularly as housing prices stay high, it also points to sustained demand in the market,” said Lains. “We expect this demographic to continue driving the housing market in Central Indiana as builders work to meet demand.”
Permit Breakdown by County:
| County | 2023 Permits (August) | 2024 Permits (August) |
|---|---|---|
| Boone County | 87 | 80 |
| Hamilton County | 259 | 247 |
| Hancock County | 50 | 130 |
| Hendricks County | 65 | 88 |
| Johnson County | 51 | 121 |
| Madison County | 51 | 9 |
| Marion County | 186 | 243 |
| Morgan County | 27 | 24 |
| Shelby County | 12 | 7 |
For further information and access to the August permit breakdown report, please visit the Builder’s Association of Greater Indianapolis website at BAGI.com/Permits.
BAGI remains dedicated to promoting, educating, and serving its members and the housing industry in the Indianapolis area, actively supporting the ongoing growth in building permits and housing market activity.
For more information about permit numbers or to discuss local homebuilding trends with Lains or other BAGI officials, contact Amanda Parker at at 317-527-6774 or amanda@thecaway.com.
