Business

Monthly home sales slide in Indiana as interest rates increase

INDIANAPOLIS (WISH) — Monthly home sales statewide fell 23% below where they were in October 2021, according to the Indiana Association of Realtors.

Four consecutive increases of three-quarters of a point by the Federal Reserve mean the cost of borrowing money for prospective homebuyers is going up.

Adam Omran recently closed on a home purchase on the south side of Indianapolis. He estimates he will pay around $300 more per month than if he had secured the loan several months ago.

“It’s definitely going to cost more than if we would have purchased, you know, six months or a year ago. Thankfully when we got approved for the mortgage, we got a fixed rate,” Omran said.

During his search, Omran found a lot of homes out of his price range. “It was difficult. It was intimidating as a first-time homebuyer.”

According to the Indiana Association of Realtors, since June, mortgage interest has added an additional $250 on the monthly payment of a $200,000 mortgage.

Andy Rudolph, president of the real estate brokers’ association, said that “because our buyer demand is starting to come down, not as many people can get into the market, but our supply also hasn’t increased. We haven’t built new housing.”

He said many homeowners are reluctant to sell because they locked in a mortgage when interest rates were low.

Rudolph said homes are still a good investment because they generally increase in value, even during inflation.