Apr 16, 2024 - News

Indianapolis rent increases among highest in nation

Change in asking rent by apartment type, Q4 2022 to Q4 2023
Data: CoStar; Note: CoStar rates multi-family buildings on architectural design, structure, amenities, site and certifications; Chart: Alice Feng/Axios

High rent prices continue to squeeze low and middle-income residents in Indianapolis.

Why it matters: They're unlikely to catch a break on rent anytime soon.

Driving the news: Rent for middle-tier apartments was up more in Indianapolis than just about any other metro area in the nation at the end of 2023, according to real estate firm CoStar Group, which rates buildings based on design, amenities, location and certifications.

The big picture: Demand for more affordable apartments is helping to keep middle-of-the-road rent prices elevated, Jay Lybik, CoStar's national director of multifamily analytics, tells Axios.

Yes, but: A flood of new construction is pushing down U.S. rents at the high end, where there are often more apartments than renters who want them.

  • That means the renters with the deepest pockets are more likely than others to score a deal.
  • While more affordable apartments saw asking rent go up 4% last year, luxury units increased by just 0.3%.

The intrigue: Most new apartments are loaded with amenities in prime locations.

  • Take the Versa building under construction in Broad Ripple, with its pool, pet spa and in-building coffee bar.

What we're watching: The pipeline for new projects is already slowing as developers find it harder to get financing.

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