New-home applications in central Indiana see first drop since mid-2023

After more than a year-and-a-half of seeing rising home applications, central Indiana residential builders experienced a drop in demand for new homes as 2025 opened.

Builders filed 700 single-family building permits in the nine-county area in January, a decrease of 3% compared with the same month of 2024, according to the latest statistics from the Builders Association of Greater Indianapolis, or BAGI.

Permit filings had risen on a year-over-year basis for 19 straight months prior to January.

Central Indiana is coming off its busiest year for home applications since 2001. For the full year of 2024, 10,044 permits were filed in central Indiana, a 26% increase over the 7,959 permits that were filed in 2023.

“The Federal Reserve’s delay in interest rate cuts, coupled with inflation concerns and policy uncertainty, has contributed to a cautious approach from both builders and buyers,” BAGI said in its January report. “However, despite these headwinds, demand for quality housing in central Indiana remains steady. Industry experts anticipate that clarity on future economic policies, particularly regarding tariffs, labor availability, and inflation trends, will help shape builder sentiment in the months ahead.”

Marion County bucked the results of the rest of the area in January with a 21% rise in filings, but six of the nine counties posted negative numbers.

January single-family building permit filings by county and year-over-year increase:

Hamilton: 245 (-1%)

Boone: 58 (-22%)

Marion: 134 (+21%)

Johnson: 55 (-30%)

Hancock: 89 (+14%)

Hendricks: 66 (-15%)

Morgan 27 (+42%)

Madison: 20 (-13%)

Shelby: 6 (-25%)