Indiana has emerged as one of the hottest housing markets in the Midwest heading into 2025. The state is seeing good price growth, fast sales, and rising rents. This is supported by strong economic factors and reasonable affordability.
Indianapolis, in particular, is attracting national attention as a housing market to watch. Meanwhile, investors are increasingly interested in Indiana’s opportunities, drawn by low costs and strong rental demand. Key recent Indiana stats (early 2025) include:
| Metric | Indiana (Jan 2025) |
| Median Home Price | ~$255,000 (↑7.7% YoY) |
| Home Sales Volume | ↑2.9% YoY (more homes sold vs. prior year) |
| Median Days on Market | 43 days (homes selling fast) |
| Percent of List Price | ~98.5% sale-to-list ratio (slight negotiation) |
| Average Rent | ~$1,500 (↑$126 YoY, +9% YoY) |
Residential Market: Indiana’s housing market is going strong, with price increases and brisk sales indicating sustained demand. The median home price reached about $255k statewide, up 7.7% from last year.
This rate of appreciation is higher than the national average. It shows Indiana’s popularity with local buyers and newcomers. Indiana home prices are much lower than the U.S. median, which is over $400,000. This makes the state appealing for people moving from costly areas.
Homes are selling fast. The average time on the market is only 43 days. During the busy spring season, well-priced homes often go under contract in 2 to 3 weeks. In fact, seasonal trends suggest DOM could drop to as low as 16 days in the summer in competitive areas.
Sales volume has gone up by 2.9% compared to last year. This means more transactions are happening.
It shows that there are many buyers. Inventory is still tight, but it has increased a little. Indeed, inventory levels have been low but are gradually improving in Indiana’s metro markets.
Buyers still often pay close to the listing price. The sale-to-list-price ratio is about 98.5% on average. This is just below the asking price. This shows that sellers still have strong pricing power.
Market hotspots: Indianapolis is the top city in the state. Zillow named Indy the #2 hottest housing market in the U.S. for 2025. This is because of its affordable prices and limited supply. Other cities like Fort Wayne, South Bend, and the suburbs of Chicago (NW Indiana) are also seeing strong competition.
Looking ahead, Indiana’s market should stay strong if job growth continues. Notable investments in manufacturing and tech help. Also, mortgage rates need to stabilize.
Buyers should expect competition. Sellers can feel confident, but adding more inventory may slow down price increases.
Rental Market:
Indiana’s rental scene mirrors the hot buying market, with rents on the rise. The average rent is roughly $1,500, up about $126 from a year ago (~9% YoY growth).
Observers have seen big jumps, especially in Indianapolis. Many young professionals and students are moving there, increasing the demand for apartments. In Indianapolis, the average rent is around $1,437 as of spring 2025, and rising steadily month-to-month.
Vacancy rates are low in Indiana’s cities. For example, Indianapolis has vacancies in the mid-single digits. This is putting pressure on rents.
One reason is that homes in Indiana are affordable. This has led many investors to turn homes into rentals. These rentals provide options besides apartments.
However, even these single-family rentals are seeing rent increases because they are in high demand. Rent growth is higher than normal inflation. This shows that landlords have the advantage. This is especially true in areas near job hubs or universities.
That said, people consider Indiana rents affordable on a national scale, as they sit below the U.S. average rent. For renters, it is important to act quickly on a good rental. Consider locking in lease terms to protect against future price increases.
Rising rents help property owners increase the cap rate on their investment properties. This makes Indiana a great place to own rentals.
One note: Many new apartment buildings are being built in downtown Indy and other areas. Some will open in late 2025. This may cause rent growth to slow down a bit as more units become available. But in the short term, expect continued rent climbs, especially for updated units in prime locations.
Investor Behavior:
Investors are bullish on Indiana. The state has low costs to buy property, good rent returns, and friendly landlord laws. This has always been appealing, and it is even more attractive now.
Indianapolis is in the spotlight. It is a popular place for people looking to buy homes.
Investors are also coming in. Indianapolis and nearby Marion County had many out-of-state investors buying single-family homes last year. They plan to turn these homes into rentals or flips.
National attention: As mentioned, Zillow’s forecast and other analyses have spotlighted Indy as a top market. This kind of attention often translates into more institutional money flowing in. Smaller cities like Fort Wayne and Evansville have seen more investor purchases. This is due to low prices and steady rental demand.
What are investors buying?
Primarily single-family houses under the median price, and small multifamily properties (duplexes, triplexes) in city centers.
For example, a 3-bedroom house in Indianapolis costs about $150,000. This price is very appealing to an investor. In another state, that same house might cost over $300,000.
Indiana has experienced cases where investors buy 30-40% of homes in some price ranges. This is especially true for homes priced below $200,000.
Investor trends:
Flipping homes is still strong. Buyers are renovating older homes in the Midwest to sell them. However, profit margins are tighter now. This is due to higher renovation costs and longer selling times compared to last year.
The buy-and-hold rental strategy is popular. Investors are counting on rising rents and population growth in Indiana’s metro areas. For property owners, if you’re looking to sell a property in need of TLC, investors will be among your likely buyers.
Investor-owned rentals can help some neighborhoods improve. However, they also raise worries about homeownership rates in communities.
As of Q4 2024, investor market share nationally was ~17%, and Indiana likely sits around or above that.
With a positive outlook for 2025, Indiana will stay a favorite for investors. High-tech employers, like Eli Lilly in Indianapolis, will create future housing demand.
City-Level Market Highlights
| City | Median Home Price | Avg. Rent | Key Insight |
| Indianapolis | $232,146 | $1,133–$1,444 | Ranked #2 hottest U.S. market; strong demand and limited inventory. |
| Fort Wayne | $245,000 | ~$1,250 | New listings up 9%; closed sales down 10%, indicating a transitional market. |
| Lafayette | $245,000 (↑27%) | ~$1,350 | Rapid price growth; homes selling in under 30 days. |
| Northwest IN | $270,000 (↑8%) | ~$1,400 | Steady sales with a 7% YoY price increase. |
| Richmond | $165,130 (↓3%) | ~$1,200 | Mixed signals: price dip but increased closings. |
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