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In May 2025, the National Association of REALTORS® and Realtor.com released an analysis of metropolitan and state-level housing affordability, “Housing Affordability & Supply.” For its state-by-state assessment, the report uses as a key metric the share of listings affordable to a household earning $75,000 a year (close to the U.S. household median income) – or a home price of roughly $255,000, using standard affordability thresholds.
By these standards, Indiana offers one of the most balanced and affordable housing markets in the nation – among the top three states in share of inventory affordable to middle-income homebuyers.
IAR decided to expand on the “Housing Affordability & Supply” report with a more detailed study of affordable housing supply statewide and by metropolitan area, also addressing affordability for other income groups using typical interest rate terms and down payment levels. We used MLS data through the IAR Data Warehouse along with Home Mortgage Disclosure Act (HMDA) and American Community Survey data to arrive at the following conclusions.
IAR’s analysis reveals that households earning $75,000 in Indiana can afford nearly 40% of homes on the market, nearly double the national average of 21%. This affordability advantage places Indiana among the most accessible states for middle-income buyers, particularly in metro areas where home prices have remained modest relative to income.
The chart above compares Indiana metros to the national and state averages, showing that middle-class affordability is strongest in cities like Marion, Richmond, and Terre Haute, where more than two-thirds of listings fall below the affordable threshold for a $75,000 income.
Meanwhile, metros like Bloomington, Indianapolis, and Lafayette show tighter conditions, with just 21% to 29% of listings priced affordably for that same household profile. Still, even these markets outperform the U.S. average.
Our affordability calculations are based on housing costs not accounting for more than 30% of household income after including mortgage payments, taxes, insurance, and PMI. Details about our assumptions for these calculations are in the methodology section.
As shown in the first chart, there is considerable variation across Indiana metros. For example:
The chart above offers a deeper look at how housing supply aligns with income distribution across Indiana metros. This view uses current listing data as of May 2025 and compares the share of households in each income bracket with the share of active listings affordable to that bracket.
In nearly every city, the data shows a clear pattern:
This supply imbalance highlights the challenges faced by low- and moderate-income buyers, especially those seeking to transition from renting to ownership.
Most mortgages are reported anonymously as public information from the Home Mortgage Disclosure Act (HMDA). This data can tell us the purchase price and loan characteristics of real buyers at different income levels.
| Income | Interest Rate | LTV | Loan Amt | Property Value |
|---|---|---|---|---|
| $1–50K | 6.75% | 5% | $125,000 | $155,000 |
| $50–75K | 6.79% | 9% | $175,000 | $215,000 |
| $75–100K | 6.88% | 10% | $225,000 | $275,000 |
| $100–150K | 6.88% | 15% | $275,000 | $345,000 |
| $150–200K | 6.75% | 20% | $355,000 | $425,000 |
| >$200K | 6.62% | 20% | $475,000 | $605,000 |
Source: 2023 HMDA
Down payments tend to be larger for higher income buyers. The median down payment is under 20% for all income groups below $150,000. Interest rates are similar for all groups, but peak for upper-middle-income buyers.
For households earning less than $50,000, the median purchase price is $155,000. That is 36% higher than the affordability limit for that group. A lack of supply in this price range pushes buyers to spend more than 30% of their income on housing costs. Out of the 500,000 homeowners who earn $50,000 or less, half are paying more than 30% of their income in housing costs.
It is difficult for many households at this income level to afford a home purchase. Half households in this income range are renting. (ACS PUMS 2023) Indiana does have a higher home ownership rate than the U.S. for households earning less than $50,000—52% compared in Indiana compared to 48% nationally.
On the other hand, home buyers at high income levels do not need to spend their full housing budget on a purchase, typically. While those in the $150,000 to $200,000 income range could afford a purchase price of $671,000, the median price for these buyers was $425,000 in 2023—that price is 37% below their affordability limit.
Listings are considered affordable if a household at the midpoint of an income range would spend no more than 30% of gross income on monthly housing costs, including mortgage, taxes, insurance, and PMI.
Estimates use Indiana averages from 2023 HMDA data for lending terms.
The first chart includes all listings from the 12 months ending in May 2025. The second chart shows listings currently active as of May 1, 2025.
Income ranges are grouped as follows: $0–50K, $50–75K, $75–100K, $100–150K, $150–200K, and >$200K. Median household income in Indiana is approximately $69,500.
