Indiana Real Estate Markets
The cleanest cash-flow math in the Midwest once you run the property-tax line. P/I 2.80, cap rate proxy 4.9%, median home $206,479. Property tax runs 0.78% — nearly half of Ohio. One caveat: one dominant metro, not three.
Investor Profile
Price-to-Income
2.8
Census ACS
Rent-to-Income
21.8%
HUD + ACS
Cap Rate Proxy
4.9%
HUD + ACS
Net Migration
0.01%
IRS SOI
Permits / 1K
4.2
Census BPS
Unemployment
3.5%
BLS
Demographics & Income
Median HHI
$71,607
Census ACS
Vacancy Rate
9.1%
Census ACS
Rent-Burdened
42.2%
% of renters paying 30%+ of income toward rent
Census ACS
Investor Climate
Rent control
1031 exchange
Deposit cap
Explore 15 metros across Indiana
Indiana
15 metros · 92 counties
Hover any county to see its metroTap any county to see its metro
Census ACS · FHFA · BLS · HUD · IRS15 metros in Indiana. Click to view full market hub.
| # | Metro | Population | HPI 5yr Growth |
|---|---|---|---|
| 1 | Fort Wayne, IN | 0.4M | 65.4% |
| 2 | Lafayette-West Lafayette, IN | 0.2M | 61.0% |
| 3 | Muncie, IN | 0.1M | 60.4% |
| 4 | Michigan City-La Porte, IN | 0.1M | 59.7% |
| 5 | South Bend-Mishawaka, IN-MI | 0.3M | 58.4% |
| 6 | Kokomo, IN | 0.1M | 58.4% |
| 7 | Cincinnati, OH-KY-IN | 2.3M | 57.1% |
| 8 | Terre Haute, IN | 0.2M | 55.6% |
| 9 | Elkhart-Goshen, IN | 0.2M | 55.4% |
| 10 | Indianapolis-Carmel-Anderson, IN | 2.1M | 53.0% |
Where Indiana sits on the distress curve
Composite index built from federal GSE loan data covering Fannie Mae and Freddie Mac single-family loans. Weighted 40% serious delinquency, 20% entrenched stress, 20% forbearance share, 20% REO inventory. Useful for spotting markets where distressed inventory is building before price effects show up. Read the full methodology →
Source: FHFA Foreclosure Prevention and Refinance Report · 2025Q4
See all 51 states rankedIndiana's 0.78% effective property tax is the lowest in the Midwest peer cohort — the fact that reorders the cash-flow leaderboard once you put it in the spreadsheet. Combined with a cap rate proxy of 4.9%, a price-to-income of 2.80, and a median home at $206,479, the math clears more consistently here than anywhere comparable. The catch: one metro — Indianapolis — carries most of the economy, which concentrates due-diligence risk.
The FHFA HPI is up 55.8% over five years and 4.4% last year — strong for the Midwest. Builders pulled 28,611 permits TTM at 4.2 per 1,000 residents — roughly double Ohio's pace. Net migration is +0.01% of 6,811,752 residents — the only net-positive state in the Midwest peer cohort. Unemployment sits at 3.5% with median household income at $71,607.
The metros sort into three tiers. Indianapolis-Carmel-Anderson ($244K median, 4.7% cap, 2.1M pop) is the anchor — Eli Lilly, IU Health, FedEx's 2nd-largest hub, and the logistics crossroads of I-65/I-69/I-70. Fort Wayne ($194K, 4.5% cap) is the strong secondary — diversified manufacturing plus defense. Muncie and Terre Haute ($128K and $132K, 6.4% cap) are the deep-value cash-flow standouts — university-town rental demand from Ball State and Indiana State.
Against Ohio, Indiana wins property-tax math decisively — 0.78% is roughly half of Ohio's rate — wins permit pace, and is the only net-positive migration state in the cohort. Ohio wins on metro diversity — three ~2M metros to Indiana's one. Against Illinois it's not close: higher property tax, higher income tax, persistent out-migration. Against Michigan and Kentucky, Indiana wins on cap rate and unemployment.
Operating environment is landlord-friendly: 30-day eviction timeline, no rent control, 70.5% homeownership, 9.1% vacancy. Insurance averages $1,246/yr. The 3.05% flat state income tax has a county surtax on top (0.5–2.9%) — Marion County adds ~2%, so Indianapolis underwriting runs at an effective ~5% income tax, not the headline.
So what does an investor do?
- Cash flow: Muncie and Terre Haute are the numbers — 6.4% cap rate proxies at sub-$135K entries. Kokomo is the next step up. The 0.78% property tax compounds everywhere.
- Appreciation: Indianapolis is the realistic single-metro play — Eli Lilly's expansion and FedEx hub growth drive organic demand. Bloomington is a college-town secondary pick.
- Out-of-state: Indiana is one of the best states on paper for cash-flow investors from outside the region — lowest property tax in the cohort, positive migration, landlord-friendly rules. Compare per-property against Ohio; Indiana usually wins on tax drag.
Cap rate measures a property's annual net operating income as a percentage of its purchase price or current market value, assuming an all-cash purchase.
Read definition →Price-to-income ratio is median-home-price divided by median-household-income—a measure of housing affordability.
Read definition →Fair Market Rent (FMR) is HUD's annual estimate of what a household must pay for gross rent — rent plus tenant-paid utilities — on a privately-owned, decent, safe unit in a specific market area. FMRs are published each fall at huduser.gov and set the ceiling for Section 8 Housing Choice Voucher payment calculations.
Read definition →A building permit is a government authorization to construct a new residential or commercial structure, and the monthly count of permits issued across the U.S. functions as a leading economic indicator that signals where housing supply is heading months before any new unit is completed.
Read definition →The percentage of time a rental property sits empty and produces no income, calculated as vacant units divided by total units — the silent profit killer in rental investing.
Read definition →Homeownership rate is the percentage of occupied housing units whose residents own — rather than rent — the property. It measures the split between owner-occupants and renters in a given geography.
Read definition →