The real estate marketplace Zillow predicts that the Indianapolis-Carmel-Anderson metropolitan area will be the second hottest housing market in the U.S. by 2025, behind Buffalo, New York.
This means homebuyers in the Indianapolis area will face one of the most competitive markets in the country, multiple forecasters agree.
Zillow predicts that home prices in Central Indiana will rise faster in 2025 than last year, making Indianapolis the only top 5 metro where steeper price growth is expected. Prices will rise 3.4% in 2025, Zillow predicts, up from 2.8% in 2024.
The National Association of Realtors also considers the Indianapolis metro area one of the top 10 housing hot spots for 2025 due to strong job growth and relative affordability in the area.
According to NAR, the metro’s job growth of 9.3% between October 2019 and October 2024 was almost twice as high as the U.S. average of 5% during that same period.
Nearly 42% of the area’s housing inventory is priced under $236,000, according to NAR, making Central Indiana an ideal market for first-time buyers and young families. The organization estimates that 31.1% of millennial renters aged 28 to 43 can afford to buy a home here, slightly above the national average of 29.7%.
Hopeful buyers in Indianapolis should expect a busy market where homes with multiple bids and offers at or above listed price are the norm, said FC Tucker real estate agent Matt McLaughlin, who helped sell more than 150 homes in 2024, becoming one of them. of the best real estate agents in the region.
“The supply is very low,” McLaughlin told IndyStar. “The buyer will have to be prepared to have all their financing together. There will be multiple offers. They have to be prepared to put their best foot forward.”
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The competitive market in Indianapolis causes prices to rise
Indianapolis may seem affordable compared to other major metro areas, but home prices here have risen 60% since October 2019, NAR reports. The average sales price of about $305,000 that Central Indiana buyers can expect to pay in January is $20,000 higher than a year ago.
Price growth in Central Indiana coincided with the spike in U.S. home prices during the pandemic. The national growth rate over the same five-year period as of October 2019 was 56.2%, according to NAR. The average American home sold for more than $400,000 by the end of 2024.
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There are some encouraging trends for buyers in Central Indiana. Prices are not expected to rise by more than 10% every year, as in 2021 and 2022. The average interest rate on a 30-year mortgage is expected to fall to 6%, real estate experts say, which would mean the interest rate will be lower. monthly payments for borrowers. On Monday the rate was around 6.9%.
The number of homes for sale is slowly growing, Average inventory in the Indianapolis area has increased about 30% to about 4,900 homes since January of last year, according to data from the Indiana Association of Realtors. Record low inventory during the pandemic was a key cause of the steep price increases in recent years, Chris Watts, IAR’s vice president of public affairs, told IndyStar.
“Homebuyers in 2025 will have more options to start the year than any January since 2020,” Watts said.
Email IndyStar Housing, Growth and Development Reporter Jordan Smith at JTsmith@gannett.com. Follow him on X: @jordantsmith09
This article originally appeared on the Indianapolis Star: Indianapolis will be the largest housing market in the US by 2025
