These days, you can’t help but see the challenges of the current housing market. A post pandemic boom sent prices soaring, and rampant inflation led to rising mortgage interest rates. It is now more expensive to purchase a house and more expensive to borrow money.
The 2023 Common Sense Institute Housing Study, “Indianapolis Metropolitan Area Housing Affordability Report”, digs into the why.
A NECESSARY DOSE OF COMMON SENSE
The Common Sense Institute is a nonpartisan research organization. Their goal is to look at the impacts that policies, initiatives, and proposed laws have on the economy.
According to CSI senior economist and study author, Dr. Steven L. Byers, “CSI recognizes the importance of affordable housing to a robust economy. Decreases in affordability are a function of supply and demand.”
KEY FINDINGS
In 2022, the Indianapolis Metro area had a housing deficit of between 18,852 – 61,238. That is between 18,852 – 61,238 individuals/households who are struggling to find appropriate housing. By 2028, the area will need to build between 66,000 – 115,000 new units to close the gap and account for projected population growth.
ON THE INCOME SIDE OF THE EQUATION:
Household incomes have not kept up with rising inflation, including on home prices. The number of hours the average person must work to cover a median mortgage payment went from 30 to 58.
The affordability of buying a house in the Indy MSA is close to its lowest point in 15 years. Since 2014, the average-price home has shot up 61% – 88%. Most of that happened between 2020 and 2022.
COMMON SENSE FOR INDIANAPOLIS
With nonpartisan studies like this, we have the data and insight we need to know. The next step is to do. Dr. Byers says the CSI report “is a useful tool for builders, zoning departments and city planners towards making informed decisions for the future of housing.”
It can be a useful tool in our hands, as well; when citizens are educated and involved, we can affect the change we need. It starts with a conversation. Visit buildindianaroots.com to learn more.
