INDIANAPOLIS, Ind--When it comes to the nation’s housing market, the Circle City is working on going against the grain.
A new study by the Pew Research Center says that homeownership in the United States is at its lowest level in 20 years. Just 63.5 percent of households own their home. This number is down roughly 6 percent from the modern peak of 69.0 percent in 2004.
The Pew Research Center says African-Americans and millennials are more vastly affected.
Indianapolis, however, is on an upward trend. According to the Indiana Business Review, since 2015, home sales have increased by 7 percent and home prices have been raised by 4.4 percent since 2015
Experts say the growth is fueled by the surging popularity and development of downtown Indianapolis, coupled with the rising cost of rent city wide.
“Rent has gone up quite a bit, even more drastically than home prices, and so when you start looking at what that is in a mortgage payment, if you’re paying $1,800 or $2,000 for a one or two -bedroom apartment downtown wouldn’t you rather put that towards something if you’re ready to make that next step?” Realtor Terry Brown asked.
Brown says millennials and empty nesters are the two largest groups helping to drive the trend. However, an inventory shortage may be getting in the way potential homeowners.
Brown says a shortage up people putting properties on the market is one of the reasons for a price surge. Essentially it’s become a simple case of short supply in an area of rising demand.
“Not as many people listed so we had more multiple offers, shorter days on market, people were purchasing homes like one or two days on market and it was driving up the price.” Brown said.
Brown says the housing price numbers may stabilize if inventory and development increases in 2017.
Despite the rise in prices, Indiana is still one of the more affordable places in the country. That could also change in the future. Home prices are starting to eclipse wage growth in the circle city.
The past two years wage growth has been less than two percent though reports say 2016’s wage growth will likely be closer to three percent, which at any rate means more people are being priced out of homes they could have afforded as little as a year ago. Experts say tightening credit standards are also playing a role.