Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowHomebuilding activity in central Indiana continued to slow last month as interest rates rose, according to the Builders Association of Greater Indianapolis.
Builders in the nine-county Indianapolis area filed only 457 single-family building permits in October, down a whopping 46% from 845 in the same month of 2021.
Permit filings have fallen on a year-over-year basis for the past 10 months and in 13 of the past 15 months. But October’s year-over-year decrease was by far the largest in any month this year.
Builders have filed 7,250 permits during the first 10 months of 2022, an 18% decrease from the same period a year ago.
Rising mortgage rates, supply-chain issues, increasing costs and limited lot availability are hampering the market, according to industry experts.
For the week ended Nov. 17, 2022, the interest rate for a 30-year fixed-rate mortgage was 6.61%, according to Freddie Mac. For the week ended Nov. 18, 2021, the interest rate for a 30-year fixed-rate mortgage was 3.1%.
Steve Lains, CEO of BAGI, characterized the slowdown as “not surprising or discouraging.”
“Mortgage rates have been unusually low these past few years, so a shift back to 6 or 7 percent rates has led to a slowdown, or rather a return to normalcy, in the market,” Lains said in a media release.
The organization predicted a decrease in sales in its State of the Industry letter in August. According to the letter, builders are prepared to see construction home sales slow by 25% through 2023.
County numbers
– After a slight rebound in September, Marion County saw single-family building permit filings drop in October from 127 in 2021 to 83 this year—a year-over year drop of 35%. on a year-over-year basis. Filings in the county are down 1% for the first 10 months of the year, to 1,147.
– Hamilton County, typically the busiest area county for home construction, saw filings sink 32% in October, from 200 to 137. Year-to-date filings are down 24% in the county, to 2,186.
– Hendricks County’s numbers fell 53% last month, to 53.
– Hancock County saw October permits decline 67%, to 38.
– Johnson County experienced a 67% decrease in filings last month, to 37.
– Filings fell 43% in Boone County last month, to 45.
– Madison County filings were down 58%, to 32.
– Morgan County filings dropped 40%, to 9.
– Shelby County was the sole county in the Indy metro area to see filings rise, jumping from 7 in October 2021 to 23 last month.
Please enable JavaScript to view this content.