May 8, 2023 - Real Estate

Affluent renters fill Indianapolis apartments

Data: RentCafe; Chart: Tory Lysik/Axios Visuals

Affluent renters opting out of homeownership are driving Indianapolis' apartment boom.

Driving the news: Downtown Indianapolis has added over 3,000 apartments in the past five years, with more than 1,700 on the way through next year, per the IBJ.

  • Much of the investment has focused on high-end projects, such as The Whit and 360 Market Square, which cater to professionals with hotel-like amenities, including rooftop pools, dog parks and fitness centers that rival expensive health clubs.

By the numbers: The number of Indianapolis-area renters earning $150,000 or more nearly doubled from 4,789 to 9,506 between 2016 and 2021, per U.S. Census data.

  • That's higher than the national average increase of 87.5%.
  • During the same period, renter-occupied households among all income levels in Indianapolis ticked up just 4% to about 275,000.

The big picture: Apartment construction is booming nationwide, Axios' Sami Sparber writes.

  • Historically, new rental housing tends to hit at the higher end of the market, Chris Salviati, senior economist at Apartment List, tells Axios.
  • That trend has become more pronounced in recent years as rising project costs squeeze developers, he says.

Between the lines: High listing prices and mortgage rates aren't making homebuying as desirable as it once was, Salviati says.

  • "A lot of folks in that high-income band, who in the past would have owned homes, are now continuing to rent — whether that's for lifestyle reasons or because they are feeling like it's not a good time to buy," he says.

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