A new report from the Indiana University Kelley School of Business shows home prices in 2017 increased at the highest annual rate since 1991. The findings, published by the Indiana Business Research Center, detail a record number of existing homes — more than 88,500 — were sold last year in Indiana. Senior Demographer Matt Kinghorn expects the strong performance to continue. In an interview with Inside INdiana Business, Kinghorn discussed the factors contributing to the numbers.
"Most of Indiana’s key housing indicators are pointing in the right direction," he said. "The real key constraint on the market right now is that there’s an exceptionally low inventory of homes for sale on the market — particularly existing homes. So, that really tight supply coupled with the rising prices should point to room for even further growth in residential construction for the next few years." Kinghorn adds that mortgage rates are expected to remain below five percent, which should continue to drive demand.
New residential building permits jumped 16 percent in 2017, compared to 2016. The total of 21,664 permits was the highest since before the Great Recession. Though ticking higher, the new construction figures remain relatively low, Kinghorn says. "While this marks a significant improvement, residential construction remains slow by historic standards," he says. "The number of permits issued for new single-family homes last year, for instance, is still only half as large as the average annual number of permits issued between 1998 and 2005."
Other figures release by the IBRC include a steadying of home ownership rates and dropping foreclosure rates statewide.
You can read more about the findings by clicking here.
Indiana Business Research Center Senior Demographer Matt Kinghorn discussed the factors contributing to the high performance.