REAL ESTATE

What income do Indianapolis homebuyers need to buy a home? It keeps going up.

Portrait of Joe Mutascio Joe Mutascio
Indianapolis Star

This has been a challenging year for anyone trying to buy a home, especially their first, as inflation and skyrocketing interest rates priced out many hopeful homebuyers.

A period of frantic buying that saw homes sold for eye-popping sums nearly as fast as they were listed has turned into a largely stagnant market with limited homes for sale.

Current homeowners largely aren't selling, choosing to remain in place to avoid losing their low-interest rates, while inflation is also shrinking the budgets of many buyers.

We took a look at the local market, thanks to recent data from real estate tracking site Redfin.

Here's what we found.

How much do you need to make to afford a home in Indianapolis?

The annual income required to afford a median-priced home in Indy is $81,794, according to Redfin. That is up 23.7% since last year.

For comparison, that places Indy 24th on the list of 100 markets, just below other Midwest cities like Milwaukee at 30th ($87,548) and Chicago at 38th ($91,367). Memphis came in just a bit higher on the list at 23rd ($79,094).

Nationally, Detroit required the lowest income at just $51,793 while San Francisco residents need to earn the most at a whopping $404,332.

Median home prices in Indianapolis

The current median home sale price in Indianapolis is $299,900, Redfin says, landing in a similar spot in the national rankings as median income required. Less expensive nearby cities on the list include Cincinnati ($285,000), Louisville ($269,900) and several smaller cities in Ohio and Michigan.

San Francisco's median home price is again staggering, coming in at $1.48M, as the seven highest are all in California.

The five lowest median home prices are Detroit, Akron, Dayton, Cleveland, and Little Rock.

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How much is a mortgage in Indianapolis?

The median monthly mortgage here is sitting at $2,045, again in the lower third of the list sandwiched between Memphis ($1,977) and Warren, Mich. ($2,064).

Detroit homeowners are paying the least at ($1,295) while San Francisco residents are paying a median mortgage just over $10,000.

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It's getting more expensive

One thing Indianapolis home buyers know is that it's gotten much more expensive to buy a home this year. But how do we compare nationally?

The year-over-year change in annual income required to buy a home in Indy is up 23.7%, higher than 67 other cities on the list.

Austin, Texas, leads the list with the lowest increase at just 7.7%, due in part to their already high prices with a median home-sale price of $462,748.

A surprising spot led the country with the highest increase in income needed to buy, Newark, New Jersey, where Redfin says buyers will need 33.4% more income this year compared to 2022.

Read the full report here.