The real estate marketplace Zillow predicts the Indianapolis-Carmel-Anderson metropolitan area will be the second hottest housing market in the U.S. in 2025, behind only Buffalo, New York.
This means homebuyers in the Indianapolis area will face one of the most competitive markets in the nation, multiple forecasts agree.
Zillow predicts that home prices in Central Indiana will rise faster in 2025 than they did last year, making Indianapolis the only Top 5 metro where a steeper price increase is expected. Prices will rise 3.4% in 2025, Zillow predicts, up from 2.8% in 2024.
The National Association of Realtors also deems the Indianapolis metro area one of the Top 10 housing hot spots for 2025 because of the area’s strong job growth and relative affordability.
The metro’s job growth rate of 9.3% from October 2019 to October 2024 was nearly twice the U.S. average of 5% in that same time period, according to NAR.
Nearly 42% of the area’s housing stock is priced below $236,000, according to NAR, making Central Indiana an ideal market for first-time buyers and young families. The organization estimates 31.1% of millennial renters, ages 28 to 43, can afford to buy a home here, slightly above the national average of 29.7%.
Hopeful buyers across Indianapolis should expect a bustling market where homes that see multiple bids and offers at or above the listed price are the norm, said F.C. Tucker Real Estate Agent Matt McLaughlin, who helped to sell more than 150 houses in 2024, making him one of the area’s top brokers.
“The supply is very low,” McLaughlin told IndyStar. “The buyer will need to be prepared to have all their financing together. There will be multiple offers. They need to be prepared to put their best foot forward.”
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Competitive Indianapolis market sends prices soaring
Indianapolis may seem affordable compared with other top metros, but home prices here have risen 60% since October 2019, NAR reports. The median sales price of roughly $305,000 that Central Indiana buyers can expect to pay this January is $20,000 higher than a year ago.
Price growth in Central Indiana coincided with the pandemic-era spike in home prices across the U.S. The national growth rate during the same five-year period starting in October 2019 was 56.2%, according to NAR. The median U.S. home sold for more than $400,000 in late 2024.
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There are some encouraging trends for Central Indiana buyers. Prices aren’t expected to rise by more than 10% each year, as they did in 2021 and 2022. The average rate on a 30-year fixed mortgage is forecast to fall toward 6%, real estate experts say, which would mean lower monthly payments for borrowers. The rate was around 6.9% as of Monday.
The number of homes for sale is slowly growing, with average inventory near Indianapolis having increased about 30% since last January to roughly 4,900 homes, according to Indiana Association of Realtors data. Record low inventory during the pandemic was a main cause of the steep price increases observed the past few years, IAR Vice President of Public Affairs Chris Watts told IndyStar.
“Homebuyers in 2025 have more options to start the year than any January since 2020,” Watts said.
Email IndyStar Housing, Growth and Development Reporter Jordan Smith at JTsmith@gannett.com. Follow him on X: @jordantsmith09
This article originally appeared on Indianapolis Star: Indianapolis is top housing market in U.S. in 2025