INDIANAPOLIS – Buying a home right now in the Indianapolis area is almost 13% more than it was a year ago.
The median sale price of an Indy home is now $287,625, according to the MIBOR Realtor Association.
Doug McCoy, director of the Center for Real Estate Studies at the IU Kelley School of Business, said demand far exceeds supply right now, but that’s not stopping people from trying.
“There are still a number of people who want a house,” McCoy said.
Nationally, the median home sale price is up nearly 16% from the same time last year.
McCoy said recent increases in interest rates and mortgage rates appear to have reduced some demand.
“Interest rates have gone from 3% to almost 6%, and that’s a huge jump,” McCoy said.
McCoy said it’s going to cost some people the price of a home and entice more people to stay in their current homes or continue renting.
“It’s sort of the worst recipe if you have high prices and a lack of supply and now high mortgage costs,” he said.
It’s not just these high mortgage rates. McCoy said general inflation also encourages people to stay put rather than buy a house.
“It’s kind of a time to hunker down, not go through a lot of change, not take on new debt commitments,” McCoy said.
Andrea Davis, Executive Director of MAIN Inc. in Hamilton County, said as home prices rose, it left behind important middle ground.
“They’re making enough money to not qualify for government programs, but they’re not making enough money to be able to afford what housing costs in this area right now,” Davis said.
HAND Inc. strives to create affordable housing for people who need help to succeed in this market.
Davis said with housing prices continuing to rise, this hopefully de-stigmatizes people from the idea of affordable housing.
“I think it opens more people’s minds to the idea that affordable housing isn’t really a bad thing,” she said.
If you’re approaching the housing market, McCoy said don’t force something that doesn’t fit your situation just because you want a house.
“There’s always an opportunity out there, you just have to be very insightful and be patient,” McCoy said.
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