Local architectural codes for new residential construction and impact fees are two areas the task force is likely to look at. Builders say these factors often add thousands of dollars to construction costs. (IBJ Photo/Eric Learned)
Housing activity in central Indiana continued to slow last month as interest rates rose, according to the Builders Association of Greater Indianapolis.
Builders in the nine-county Indianapolis area filed just 457 single-family home building permits in October, down a whopping 46% from 845 in the same month of 2021.
Permit applications are down year over year in the last 10 months and 13 of the last 15 months. But October’s year-on-year decline was by far the biggest of any month this year.
Builders submitted 7,250 permits in the first 10 months of 2022, down 18% from the same period a year ago.
Rising mortgage rates, supply chain issues, rising costs and limited lot availability are hampering the market, according to industry experts.
For the week ended November 17, 2022, the interest rate on a 30-year fixed-rate mortgage was 6.61% according to Freddie Mac. For the week ended November 18, 2021, the interest rate on a 30-year fixed-rate mortgage was 3.1%.
BAGI CEO Steve Lains called the slowdown “not surprising or disheartening.”
“Mortgage rates have been unusually low in recent years, so a move back to 6 or 7 percent has resulted in a slowdown or rather a return to normalcy in the market,” Lains said in a press release.
The organization forecast a drop in sales in their State of the Industry Letter in August. According to the letter, homebuilders are prepared for a 25% decline in construction home sales by 2023.
— After a slight rebound in September, Marion County saw its single-family home building permit applications fall in October from 127 in 2021 to 83 this year — a 35% decrease from a year earlier. on an annual basis. Registrations in the county fell 1% to 1,147 in the first 10 months of the year.
— Hamilton County, normally the busiest county for housing, saw applications fall 32% in October from 200 to 137. Year-to-date applications in the county are down 24% to 2,186.
– Hendricks County’s numbers are down 53% to 53 last month.
– Hancock County permits fell 67% to 38 in October.
– Johnson County saw filings fall 67% to 37 over the past month.
– Filings fell 43% to 45 in Boone County last month.
– Madison County filings fell 58% to 32.
– Morgan County filings fell 40% to 9.
– Shelby County was the only county in the Indy metropolitan area to see filings increase, going from 7 in October 2021 to 23 last month.