What 2026 could mean for Indiana's real estate market
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For 2026, Hoosiers should expect lower mortgage rates but a still-tough housing market.
State of play: The National Association of Realtors has named Indianapolis one of its top 10 homebuying hotspots for 2026, citing low rates and large inventory.
Why it matters: Not everyone will be able to keep up in our increasingly competitive market, especially younger people.
- "Even though budgets go further here, the market is still challenging for first-time buyers," Indiana Association of Realtors president Kim Ward said in a statement. "That's why sales above $250,000 account for all of our year-over-year growth while demand at starter home prices is still sluggish."
Zoom in: Here's what industry experts predict for this year.
📉 Rates will stay above 6%
U.S. mortgage rates are expected to hover near 6.3% in 2026, according to Realtor.com chief economist Danielle Hale.
- Redfin also projects 30-year fixed rates will average 6.3%, dipping from 6.6% in 2025 while staying well above pandemic-era levels.
- Hale tells Axios that challenges like the lack of affordability and the "lock-in effect" on homeowners are going to be present in 2026, "but the grip is kind of loosening."
The big picture: Cheaper monthly payments could lift home sales, even if they won't move the needle for every buyer as economic uncertainty and other costs loom large.
Also offering shoppers some relief: Wages are expected to grow faster than home prices, which will rise another 1% in 2026, per Redfin's forecast.
- Ward says if rates continue to improve, "we can expect more Hoosiers to come off the sidelines in search of their first home in 2026."
🏠 Tale of two markets persists
Homes are generally selling faster in the Midwest and Northeast, and slower in the South.
Case in point: Indiana homes spent a median of 31 days on the market in October — well below the U.S. median of 51 days, per Redfin.
Zoom out: Homes are changing hands at record low rates nationally.
- Roughly 70% of homes for sale in October sat on the market for at least 60 days, long enough to go "stale," according to Redfin.
Between the lines: Robert Dietz, chief economist for the National Association of Home Builders, said cities like Indianapolis, Columbus, Ohio, and Kansas City benefit from not only more affordable options, but also proximity to major universities.
By the numbers: Indianapolis' average sale price in November was $235,000, lower than the national median of $433,261 and down 3.5% year-over-year, per Redfin.
👶 More roommates, fewer babies
High housing costs may be reshaping U.S. households.
- Think: More adult children living with their parents (and vice versa), smaller families and more friends buying homes together, according to Redfin researchers.
What we're watching: "Renovations that create space for multiple generations are becoming increasingly common" — from garage conversions to separate suites for adult kids or aging parents — as "families rethink the homes they already have," Redfin chief economist Daryl Fairweather tells Axios.