UPDATE: The latest Fall 2025 Kelley Real Estate Outlook has just been released, revealing alarming trends in the Indiana housing market. This urgent report from the Indiana University Kelley School of Business highlights a significant rise in serious delinquencies on Federal Housing Administration (FHA) loans, which are crucial for first-time home buyers.
Latest data shows that FHA mortgage delinquencies surged from 3.7% in mid-2024 to 4.8% by February 2025. This trend signals a broadening affordability crisis affecting many families across the region. Jun Zhu, a clinical associate professor at Kelley, emphasizes that this uptick is driven by growing financial stress among borrowers as inflation outpaces wage growth, making it harder to save for emergencies.
In a statement, Zhu noted,
“Delinquency rates have climbed across auto loans, credit cards, and buy-now-pay-later products, suggesting a broad-based affordability crisis rather than housing-specific issues.”
This reflects a troubling shift in economic stability, potentially impacting homeownership rates moving forward.
The report also features insights from Chris Hancock, CEO of the Builders Association of Greater Indianapolis (BAGI). He pointed out that, while national trends indicate slowing growth in new home construction, Central Indiana is bucking the trend with a 6% year-over-year increase in single-family building permits for June 2025. Hancock stressed, however, that builders are grappling with significant challenges, including supply chain delays and rising material costs.
Hancock stated,
“While home prices have stabilized, affordability remains the most pressing concern for both buyers and builders.”
The report suggests that collaboration among builders, policymakers, and community leaders is essential to navigate these hurdles effectively.
The Kelley Real Estate Outlook serves as a critical resource, bridging the gap between academic research and practical industry insights. It aims to equip real estate professionals with the data-driven tools needed to respond to these urgent market changes.
Additionally, the report includes the Power Grid, a valuable tool providing consolidated market metrics, which aims to enhance accessibility for industry stakeholders. Sara Heidtmann Coers, associate director of the Center for Real Estate Studies, emphasized the importance of making reliable data freely available, stating,
“Our goal is to maximize value for readers by presenting information in clear, industry-focused language.”
As the housing market continues to evolve, the implications of these findings are profound. Stakeholders must take immediate action to address the growing affordability crisis and ensure that homeownership remains attainable for future generations.
Stay tuned for ongoing updates as experts continue to analyze these critical trends impacting Indiana’s housing market. The urgency of these developments cannot be overstated, and proactive measures are essential to protect homebuyers and builders alike.
