Indiana Real Estate Market Defies Expectations, Surges in February Despite Rising Mortgage Rates

Written from press release

INDIANAPOLIS, Ind. — March 13, 2024

Indiana’s real estate market experienced a notable rebound in February, defying expectations amid rising mortgage rates, according to data released by the Indiana Association of REALTORS®.

Statewide home sales surged by 21% from January to February, reaching a total of 5,113 closings, marking a 3% increase compared to the same period last year.

Jennifer Parham, managing broker of Lighthouse Realty and 2024 president of the IAR, commented on the unexpected resilience of the market, stating, “Mortgage rates inched up last month but home sales hardly slowed. The pace of the market shows growing confidence that we’re turning the corner on interest rates and inflation for the long haul.”

Furthermore, new pending sales also saw a significant increase of 11%, indicating robust activity in the housing sector despite the upward trend in interest rates throughout February.

A key aspect of the market’s strength was the rise in new listings. February saw 6,499 homes newly listed for sale statewide, reflecting a 10% increase from January and an 11% increase compared to February 2023. This surge in listings suggests growing confidence among sellers to capitalize on increased demand and higher prices.

The statewide median sale price climbed to $238,000 in February, marking a 3% increase from the previous year. Additionally, homes sold for 95% of their original listing price on average, indicating strong demand and competitive bidding among buyers.

However, the robust demand has led to a tightening of inventory, with the overall supply of homes for sale dropping to an average of 10,213 listings on any given day in February. This represents a 14% decrease compared to the previous year, further driving up prices.

Despite the positive indicators, challenges remain, particularly for first-time homebuyers. Parham noted a decrease in inventory for homes priced under $200,000, urging prospective buyers to be prepared and decisive in their search.

Local and regional trends also showed varying degrees of growth across different areas of Indiana. Marion, Lake, and Allen counties, Indiana’s three largest counties, all experienced positive year-over-year sales growth in February.

In the Indianapolis metro area, overall sales totaled 1,949 closings, with several surrounding counties witnessing double-digit sales growth.

The Fort Wayne region emerged as a standout performer, with significant increases in both sales and listings. Similarly, Clark County led Indiana’s portion of the Louisville metro to 5% sales growth.

Overall, Indiana’s real estate market appears to be on a positive trajectory, buoyed by strong demand and increasing prices. As interest rates are expected to stabilize in the coming months, the outlook for the housing market remains optimistic.

For further details and local real estate data, the Indiana Association of REALTORS® directs interested parties to their Indiana Housing Hub.

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