INDIANAPOLIS — Buying a house right now in the Indianapolis area costs almost 13% more than it did a year ago.
The median sales price for an Indy home is now $287,625, according to the MIBOR Realtor Association.
Doug McCoy, the director of the Center for Real Estate Studies at the IU Kelley School of Business, said demand is far outpacing supply right now, but that isn’t stopping people from trying.
”There are still a number of people out there who want a house,” said McCoy.
Nationally, the median home sales price is up almost 16% compared to this time last year.
McCoy said recent increases in interest and mortgage rates appear to have decreased some demand.
“Interest rates have gone from like 3% to near 6%, and that is a huge jump,” McCoy said.
McCoy said this is going to price some people out of a house and make more people stay put in their current house or keep renting.
”It’s kind 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 those high mortgage rates. McCoy said general inflation is also leading people to stay put rather than buying a home.
”It’s kind of a time to hunker down, not go through a lot of change, not make new commitments toward debt,” McCoy said.
Andrea Davis, the executive director with HAND Inc. in Hamilton County, said as home prices increase, it’s leaving behind an important middle ground of people.
”They make enough money that they don’t qualify for the government programs, but they don’t make enough money to be able to afford what housing is costing right now in this area,” Davis said.
HAND Inc. works to create affordable housing for people who need help making it in this market.
Davis said with the continued rise in housing prices, it is hopefully de-stigmatizing people to 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 does not fit your situation just because you want a house.
”There is always an opportunity out there, you just have to be very discerning and be patient,” McCoy said.