Indiana housing market shifting toward balance
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The chief executive officer of the Indiana Association of REALTORS says the state is starting to see a shift to a more balanced housing market. Over the first six months of the year, home sales were down 2.4%, while new listings increased 4.7% percent. “After two years of surging demand chasing fewer homes for sale, increasing inventory is good news for Hoosier homebuyers,” said Mark Fisher, who adds sellers are still benefiting from rising prices.
In an interview with Inside INdiana Business, Fisher said the shift is due to several factors.
“There is a lot of uncertainty around inflation, the impact of the interest rates rising and mortgage rates rising. Even though we have strong employment and wage growth, there’s just a lot of uncertainty in the market,” said Fisher. “So, we are starting to see a little reduced demand, and on the positive side, we’re starting to seen an uptick in inventory.”
The association says median sales prices were $250,000 for June, up 13.6% year-over-year, but still down from May’s 14.8% and the year-to-date growth of 15.5%.
Looking forward, Fisher says he expects the Federal Reserve to look at raising interest rates, which will have an impact on mortgage rates. However, he says Indiana still has a strong housing market.
“We still have a lack of inventory overall; we haven’t seen a year-over-year increase in inventory since 2014,” he said. “So, we do see that while the demand has softened a little bit, it’s still a very, very health market. Prices continue to go up…but we are starting to see that level off. So, [it’s] great for consumers [and] great for individuals that are looking to enter the market.”
The association says, among Indiana’s urban counties, Lake and Vanderburgh counties saw the sharpest increases in year-to-date new listings at 6% and 8.1%, respectively. The northwest and southwest regions are also seeing year-to-date sales higher than the first six months of 2021 at 1.1% and 0.9%, respectively.
Fisher reiterates the market is in a good place, especially for first-time homebuyers.
“Even where the mortgage rates are going, they’re still at historic lows; they’re still affordable,” he said. “The uptick in the inventory and the slower demand is great for homebuyers.”