Sales and Listings

Indiana’s real estate market in 2024 was very similar to 2023.

• Closed home sales totaled 78,400 for the year, 300 more than 2023.
• 2024 would have finished clearly ahead of 2023 if not for a steep drop-off in June closings (7,088 versus 8,226 in 2023) as early homebuyer enthusiasm was dampened by rates reaching 7% in late April and staying above that level through May.
• New listings finished 3% above 2023, driven mostly by sellers returning to the market through mid-spring (before pessimism on rates had fully sunk into the market).

Strong Price Pressure

Despite relatively low demand, price growth picked up.

• The median sale price climbed by 4% to 255,000. Price growth was also 4% in 2023.
• Prices peaked at a median of $270,000 in June (6% higher than June 2023).
• Price growth accelerated in the fall, reaching 7-8% year-over-year growth from October to December.

Déjà vu all over again?

Mortgage rates stayed elevated in 2024.

• After the Federal Reserve raised rates eleven times in 2022 through July 2023, there was optimism that mortgage rates would fall with less restrictive monetary policy in 2024.
• Ultimately, rates averaged 6.72% for the year, just below the 2023 mark of 6.81%. And 2024 rates were slightly higher year-over-year from May through August, the heaviest homebuying months.

Lock-in Effect

Even with more listings hitting the market, the lock-in effect still kept sellers on the sidelines.

• New listings will come close to 93,500 total for the year, about 3% above 2023 – but for context, 2024 and 2023 are the only two years in the last 20+ that Indiana’s annual listings have fallen below 100,000.
• Nearly 75% of all homeowners with a mortgage have a rate less than 5% nationally; while more homes were listed for sale in 2024, the difference in mortgage rates for those who will be financing part of their next home purchase is still a barrier.

Inventory

Inventory rose to its highest statewide level since 2019, in a bright spot for buyers.

• Roughly 13,200 homes were listed for sale on a typical day in 2024, up from 11,300 average daily listings in 2023.
• With more homes on the market and fewer buyers competing for them, active homebuyers had more leverage – sellers accepted less than 96% of their original asking price, about a quarter-point less than 2023.
• With homes staying on the market longer (about 15 days from listing to pending sale compared to less than two weeks in 2023), half of all available homes had a price reduction since listing by the end of the year.

Housing Shortage

Indiana still has a long-term housing shortage that’s impacting the real estate market.

• While 13,200 average daily listings is an improvement in residential inventory, compare this number to more than 17,000 homes for sale on average in 2019 and 37,000 in 2014.
• And while the market moved slower in 2024, 15 days from listing to pending sale is still a faster pace than 2019 (19 days) or 2014 (45 days).
• Historically tight supply kept homes selling faster than the pre-pandemic market and prices rising faster than inflation.
• Even though year-over-year appreciation has slowed from the double-digit increases of 2020-2022, Indiana’s median home price has more than doubled over the past decade as inventory has steadily fallen.

What does 2024 tell us about 2025?

Even if mortgage rates stay above 6%, home sales should grow year-over-year.

• The past two years show that even with potential sellers choosing to stay put and protect their low-rate mortgages, the market continues to be driven by life’s circumstances – job opportunities, household changes or other family issues, etc.
• Even if rates don’t fall as far as we’d like, buyers and sellers who have put off moving plans may finally ‘bite the bullet’ and pursue their new or next home.

Pent-up Demand

Since 2022, these positive economic and demographic trends drive the Indiana housing market

• Indiana non-farm employment has grown by more than 100,000 jobs;
• Indiana has added roughly 50,000 new households;
• More than 150,000 children have been born across the state;
• Hundreds of thousands of Hoosiers have changed jobs within the state; and
• Indiana has had seven straight years of positive net domestic migration. In that time, we've added 40,000 new residents from other states and 90,000 from other countries.

We'll dive into these in more detail in the next slides.

Population Details

• The population grew by 44,000. With an average of 2.5 people per household, that's about 18,000 new households.
• Natural change added 9,000 people—79,000 babies were born and 70,000 people died.
• Migration added 35,000 residents—4,000 from other states and 31,000 from other countries.

Economic Growth

• Through Q3 2024, Indiana's economy grew at a 3.2% annualized rate.
• This is the fifth-best growth rate in the U.S., welcome news after Indiana's 1.3% growth in 2023 ranked fifth lowest in the U.S.
• In Q3 itself, the economy grew at 3.9% driven by retail, manufacturing, and state and local government sectors.
• Personal income grew at an annual rate of 2.9% through Q3, which ranks 22nd in the U.S.

New Home Construction

Builders pivoted from multi-family to single-family homes in 2024.

Single-family permits increased 22% to 20,000.

Single-Family Construction

Most metro areas saw an increase in single-family permits

The Indianapolis region had 8,700 new permits, 2,000 more than last year.

Multi-Family Construction

Multi-family permits fell 35% to 6,500.

Still, many mid-sized cities had very strong multi-family growth.