Hoosier home sales jumped 17 percent from January to February in an unusually sharp seasonal increase, according to M.L.S. data just released. February’s total of 4,895 homes sold was 15% below 2022, continuing to close the year-over-year sales gap that had grown four straight months before narrowing in January. The Indiana Association of Realtors says homebuyers took advantage of more higher inventory with a less competitive market and mortgage rates lower than the 7 percent or higher levels of October and November.
February also brought 5,818 new listings to market across the state, just 7% lower than 2022 and 6% above 2021. Despite an active month for listings, rising sales caused total inventory to dip slightly from January for a daily average of 12,639 homes for sale – more than double last February’s supply while remaining well below pre-2020 levels. (By comparison, 16,115 homes were listed in February 2019.)
Indiana’s median home price also increased at a slightly faster pace from $215,000 in January to $230,000, continuing a steady trend of positive year-over-year price appreciation by finishing 5% above February ‘22. Homes sold for just below 95% of their original list price last month, down from 99% in early 2022 as homebuyers take advantage of higher inventory and less competition in the market.
“Home sales in 2023 are running just 20% below the first two months of 2022, the end of a record-setting real estate market before mortgage rates climbed past 4% on their way to 7% in October,” said Mark Fisher, CEO of the Indiana Association of REALTORS® (IAR). “After falling through the end of last year, sales and listings continue to stabilize as buyers and sellers adjust to a more balanced market.”
IAR 2023 President Lynn Wheeler cautioned that a promising start to 2023 doesn’t guarantee a full-blown real estate recovery even as buyers venture back into the market. She added that thirty-year mortgage rates ticked up to a four-week average of 6.4% through February with slowing improvement on inflation, though they remain two-thirds of a point lower than their November peak.
“Homebuyers have more options and negotiating power in 2023, but with the tradeoff of higher lending rates than the historic lows of 2021,” Wheeler said. “Even with average housing costs 33% lower than the U.S., Hoosiers are still sensitive to rate changes impacting monthly mortgage payments.
“Indiana’s population and employment gains are driving demand for housing and bolstering our market so far in 2023, but we aren’t immune from national challenges,” Wheeler finished.
