A variety of issues is causing some people who are considering building a home to pause those plans. The Builder’s Association of Greater Indianapolis says there was a 24% decrease in single-family permits in April, compared to the same period a year ago.
BAGI says rising interest rates, overall inflation and a volatile stock market is behind the decrease in the nine-county, central Indiana region.
According to the latest data, 801 permits were issued last month compared to 992 in April 2021.
Old Town Design Group Owner Jeff Langston, who is the former BAGI president, believes the challenges have led to a more serious issue of affordability, which is a large contributing factor to the slowdown in permits issued.
“The ‘under $400,000’ home market represents almost 75% of the market,” said Langston said. “The cost of housing has now priced out a section of the market. This price range is driven by cost of payment and with increased rates, coupled with increased costs, the most susceptible market has seen the impact first.”
The organization says the easing demand is allowing homebuilders and remodelers to catch up on previous contract work which has been mounting over the past two years.