INDIANAPOLIS — New numbers show steady demand for newly-built homes in central Indiana, but still not enough to meet demand.
According to the Builder’s Association of Greater Indianapolis (BAGI), new home building permits in December were up 36% overall compared to the same month last year. Johnson and Madison counties saw the biggest jumps, up 442% and 260%, respectively. Some counties saw declines, but BAGI President Steve Lains said the nine-county metro area remained steady in 2023 at about 8,000 permits — about the same as 2022. This is due, in part, he said, to stabilizing interest rates.
“I really do think that the market is going to be a solid market this year,” Lains said.
But he also said that is only part of the picture.
When it comes to that first-time home buyer or those looking to move into the $200,000–$350,000 price range, Lains said there just haven't been enough of those homes built over the last decade.
“We think we're short in this market just looking at new construction of about 60,000 houses,” Lains said. “So at 8,000 (new) houses a year, we're really just keeping up.”
Lains said much of the buyer demand is coming from millennial buyers.
“They were silent in the marketplace up until these last couple of years … they're as big a demographic as that baby boomer, and we just don't have that supply in the ground to meet their needs. We haven't for a long time, and it's just harder," Lains said.
Builders have cited increasing challenges because of the price of land, the cost of developing that land and the cost of building materials. It has all shot up over the last several years — not to mention a labor shortage in the construction industry.