After Indiana housing prices soared as high as 17% over the course of 2021, market forces have imposed a correction, driving the Hoosier real estate market to record levels it hasn’t seen in over a decade according to Marc Jaffe an Indianapolis Investor. 2022 looks set to be a much brighter year for buyers as single-family constructions are up nearly 25%, equipping the market with potential new homes.
As urban development continues to grow throughout Indiana, this trend is likely to continue throughout the year and into the future. This is further helped by a drop in mortgage delinquencies as the U.S. slowly recovers from the COVID downturns. Let’s take a closer look at some of the trends currently affecting the Indiana real estate market and discover why it remains strong.
Low-to-Middle Income Homes are Becoming More Available
To put it mildly, 2021 wasn’t a good year for potential home buyers. On average, housing prices rose 18.8% around the nation, driven largely by supply chain disruptions, labor restrictions, and rising inflation. This sudden price jump pushed the dream of homeownership out of reach for many low-to-middle income Hoosiers.
Fortunately, this downturn in sales has driven developers to switch tactics and begin building more affordable properties. As of the first quarter of 2022, single-family constructions are up 24%, bringing state constructions up to a level not seen since 2006. This signals a new chapter for young and low-income Hoosiers who can now—hopefully—afford to purchase their first home.
Mortgage Delinquencies are Down
The Indiana real estate market is still feeling the effects of the COVID pandemic, but there are some signs of improvement. Mortgage delinquencies have fallen to their lowest levels since the pandemic began, a good sign for the future of the local real estate industry.
This decrease in delinquencies is largely driven by the federal government’s stimulus programs, which have put more money into the pockets of Americans and helped them stay afloat during these difficult times. As the economy continues to recover, we can expect to see this trend continue.
A decrease in delinquencies will also encourage lenders to make mortgages more accessible to the general population. As fewer customers miss payments, financial institutions will have more trust that they’ll get their money back and make funds available to hopeful home buyers.
The Future of the Indiana Real Estate Market
Compared to the rest of the country, the Indiana real estate market has remained strong throughout the pandemic and is only expected to get stronger in the coming few years. Although local housing prices may have sharply risen, Indiana’s 17% jump is still lower than the national average.
With single-family constructions on the rise and mortgage delinquencies falling, now is a great time to invest in Indiana real estate. All of the market indicators show that Indiana’s real estate industry will continue to grow as urban populations rise.
The Bottom Line
The Indiana real estate market may have taken a hit along with the rest of the nation but it’s now in a good position to grow and return to profitability. Housing prices are expected to drop, encouraging buyers to invest in new homes throughout the state.