Indiana Real Estate Oct 2025

​# The Current State of Real Estate in Indiana: October 2025 Update

As we head into the final quarter of 2025, Indiana's real estate market continues to show resilience amid national economic shifts. With steady price growth, increasing inventory, and recent Federal Reserve interest rate adjustments, the Hoosier State offers a balanced landscape for buyers, sellers, and investors. This post dives into the latest trends, backed by data from September and early October reports, highlighting what's driving the market and what to expect moving forward.

## Home Prices and Market Trends

Home prices in Indiana have maintained an upward trajectory throughout 2025, though at a moderated pace compared to previous years. As of September 2025, the median home sale price stood at $276,200, marking a 4.5% increase from the previous year. Zillow reports the average home value at $251,301, up 3.2% year-over-year, reflecting a stable but not overheated market. In Central Indiana, prices are higher, with the median sales price reaching $309,998 in September—a 4.1% rise.


New listings have dipped slightly month-over-month but are up 10% compared to September 2024, indicating sellers are gradually returning to the market. Homes are spending more time on the market, with days on market up 43% in Central Indiana, signaling a shift toward a more buyer-friendly environment.

Here's a quick snapshot of key price metrics across sources:


| Metric | Value (September 2025) | Year-Over-Year Change |
|--------|------------------------|-----------------------|
| Median Sale Price (Statewide) | $276,200 | +4.5%  |
| Average Home Value | $251,301 | +3.2%  |
| Median Listing Price | $299,900 (August) | Stable  |
| Central Indiana Median | $309,998 | +4.1%  |

## Inventory Levels: A Welcome Increase

One of the most notable developments in 2025 has been the rise in housing inventory, alleviating some of the supply constraints that plagued the market in prior years. In September, there were 28,496 homes for sale statewide, a 13.1% increase year-over-year. Active listings reached 17,092, and overall inventory is up 24.8% from 2024 levels in some reports.

This buildup—now at about 1.8 months of supply in key metros like Indianapolis—has given buyers more options and reduced bidding wars. However, inventory remains below pre-pandemic norms, keeping upward pressure on prices in high-demand areas.













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## Interest Rates and Their Influence

Interest rates have been a key factor shaping Indiana's market this year. Following the Federal Reserve's quarter-point rate cut in September 2025, mortgage rates have eased, with 30-year fixed rates hovering around 6.4% as of October. This relief has boosted buyer activity, though higher rates earlier in the year (peaking near 7%) slowed sales and contributed to affordability challenges.

Lower rates are expected to stimulate demand, potentially leading to a 1.5% dip in existing home sales for the year but setting the stage for recovery. For Indiana specifically, this means more accessible financing, especially in affordable regions where median prices remain below the national average.

## Regional Variations Across the State

Indiana's market isn't uniform—urban centers like Indianapolis and Bloomington are outperforming rural areas. In Central Indiana, inventory has climbed 17%, but price cuts are at an 8-year high, suggesting sellers are adjusting expectations. Bloomington's market mirrors statewide trends, with median prices up 4.4% to $283,100.

Northern areas like Fort Wayne show mixed results, with some price gains, while southern and rural regions face slower sales due to economic factors. Emerging hotspots, such as Millersburg and Indiana Harbor, have seen remarkable value growth, up to double digits in some neighborhoods. Foreclosure rates are elevated in parts of the state (1 in 2,697 units), ranking Indiana fourth nationally, but this hasn't triggered a broader downturn.

## Outlook for Late 2025 and 2026

Looking ahead, experts predict continued moderation. Home price growth is forecasted at 3.8% for the remainder of 2025, slowing to 3.6% in 2026. Sales could jump nearly 10% in 2026 as rates drop to around 5.9%, encouraging more transactions. Inventory improvements should persist, but affordability remains a concern with home values up 48% since 2020.

No crash is anticipated, thanks to steady demand and limited supply. For buyers, now might be a good time to enter with more choices available; sellers should price competitively to avoid extended listings.

In summary, Indiana's real estate scene in October 2025 is one of cautious optimism. With improving inventory and easing rates, the market is transitioning toward balance. Whether you're buying, selling, or investing, staying informed on local trends will be key to navigating this evolving landscape. If you're in the market, consult a local realtor for personalized insights!

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