Indianapolis-Carmel-Anderson, IN
A steady Midwest metro where home prices have outpaced the national average over five years, but the action is in the suburban ring — not the urban core. Hamilton County is building 3.5× more homes than Marion despite holding only 17% of the metro's population. Net IRS migration is barely positive at +474 returns — the metro is high-churn, not high-growth.
The numbers that matter most
What an investor checks first when sizing up a new metro — affordability ratio, rent vs income, cap rate proxy, and where the market is moving. Each metric shown vs. state and national medians for instant context.
moderate
Price to income
3.17×
The single most-cited 'is this market still cheap' check. Below 3× and you're in an affordability tailwind.
- vs Indiana
- 2.80×
- vs U.S.
- 3.43×-0.26
Benchmark
ACS median home value ÷ median HHI
comfortable
Rent to income
22.9%
What share of a typical household's income goes to rent. Below 30% means tenants can absorb modest rent increases.
- vs Indiana
- 21.8%
- vs U.S.
- 23.3%-0.3
Benchmark
(HUD FMR 2BR × 12) ÷ median HHI
deal-by-deal
Cap rate proxy
4.7%
Rough first-pass yield assuming a 35% expense ratio. Not an underwriting number — a 'is this even worth modeling' filter.
- vs Indiana
- 4.9%
- vs U.S.
- 4.4%+0.4
Benchmark
(FMR 2BR × 12 × 0.65) ÷ ACS median home value
steady
Net migration
+0.02%
Forward-looking demand signal. Positive net migration drives rent growth and absorbs new supply.
- vs Indiana
- -0.01%+0.04
- vs U.S.
- 0.04%
Benchmark
IRS net migration ÷ population
pipeline accelerating
Permit pipeline
5.91
permits per 1,000 residents
Forward-supply indicator. Above ~5 means the metro is building meaningfully relative to its size; below 2 means supply is tight.
- vs Indiana
- 2.82+3.09
- vs U.S.
- 3.49+2.42
Benchmark
Census BPS permits TTM ÷ population × 1,000
very tight labor market
Unemployment
2.5%
-1.2pp YoY
Tighter unemployment means higher wages, more rental demand, lower vacancy.
- vs Indiana
- 2.5%=
- vs U.S.
- 4.0%-1.5
Benchmark
BLS LAUS, latest month
Section index — click any row to jump
What the data says about Indianapolis
Indianapolis is a quintessential Midwest investor's metro — steady, deep, and unfashionable in the best possible way. The metro spreads across 11 Indiana counties holding 2.1 million people, and it pulls more building permits than anywhere else in the state: 12,460 in the trailing twelve months per the Census Building Permits Survey, up 26.7% year-over-year. Wages sit at a $77,065 median household income — workable for both tenants and landlords — and the FHFA House Price Index is up 53% over the last five years (Federal Housing Finance Agency data). None of those numbers are extreme. Together, they describe a market that compounds rather than spikes.
The story inside the metro is a tale of two halves. The action — the permits, the income, the new construction — is concentrated in the suburban ring, not the urban core:
- Hamilton County is the standout. 350K residents, $117,957 median household income (the highest in Indiana), and 4,714 permits TTM — more than a third of the metro's entire pipeline despite holding only 17% of the population.
- Hendricks (+62.9% YoY permits), Boone (+54.6%), and Johnson (+30%) are all building hard.
- Marion County — Indianapolis proper, the urban core — is much larger at 972K residents, but median household income is $63,450 and permits are falling: down 16.8% year-over-year.
If you're tracking where the money is going, it's leaving the city center.
What's changing on top of that: net migration into the metro was +474 returns in the most recent vintage from the IRS Statistics of Income — barely net positive at +0.02% of population. The gross flows tell the real story: roughly 51,000 tax returns moved in, and almost as many moved out, leaving a razor-thin net. Indianapolis isn't bleeding residents, but it isn't a runaway inflow story either — it's a churn market where the biggest out-of-state origin was Cook County, Illinois, and Indianapolis simultaneously pulls from its own smaller cities (Bloomington, Muncie, Lafayette, Columbus) while losing households to other metros. BLS unemployment sits at 2.5%, down 1.2 points year-over-year — top-17% nationally for tightness (Bureau of Labor Statistics LAUS).
So what does an investor do with all of this?
- If you already own here, the data says hold. The pipeline points to slow appreciation in the urban core and faster growth in the suburbs.
- If you're looking to enter, the suburban ring — Hamilton, Hendricks, Boone — is where the math works today. Affordability is gone there, but the demand is real and the supply is being built to meet it.
- The Marion County play is a different bet entirely: value over growth, and it depends on a thesis about urban-core revival rather than the suburban-builder thesis the rest of the metro is running on. Indianapolis sits next to Columbus, OH on this dimension — the cap rate proxy here (4.7%) is the best in the Midwest peer set.
Where prices are and where they've been
FHFA House Price Index — repeat-sales index across the metro, sized against this metro's median household income and benchmarked against the Indiana metros average and U.S. metros average.
5-year price appreciation
+53.0%
FHFA HPI · Q1 2020 → Q4 2025
+1.4% YoY
$244,000 median home value
Indianapolis home prices climbed 53.0% over the last 5 years according to the FHFA repeat-sales index — a steady appreciation pace for a Midwest metro of this size. The 1-year change has cooled to 1.4%, signaling the post-2022 surge has unwound into steady-state appreciation.
See the chart below for how the metro's appreciation curve stacks up against the Indiana metros average and the U.S. metros average. The gap between the metro and the national line is the "catch-up" or "lag" signal — and the slope tells you whether the gap is widening or closing.
How to read it
- 01Indianapolis (teal) tracks closely with the Indiana metros average — it dominates the state-level number because it's by far the largest metro.
- 02The U.S. metros average (rust, dashed) sits structurally higher because the national average includes high-cost coastal metros.
- 03All three lines show the same shape: flat through 2020, sharp 2021–2022 run-up, then a gentler slope from 2023 onward.
- 04Indianapolis grew 63% over 5 years vs the national 57% — Indianapolis OUTPACED the national average by ~6 points despite starting from a lower base.
Where the value tier sits — top 5 counties by home value
| County | Median home value | Median HHI | Price-to-income | Verdict |
|---|---|---|---|---|
| Hamilton County | $379,100 | $117,957 | 3.21× | moderate |
| Boone County | $341,800 | $104,865 | 3.26× | moderate |
| Hendricks County | $281,500 | $99,988 | 2.82× | affordable |
| Johnson County | $260,400 | $87,227 | 2.99× | affordable |
| Hancock County | $258,100 | $91,326 | 2.83× | affordable |
How to read the FHFA House Price Index
FHFA HPI is a repeat-sales index — it tracks the price change of the same properties over time, smoothing out new construction and luxury transactions. It's built from the mortgage data the GSEs (Fannie Mae, Freddie Mac) already see, which makes it free of MLS survey error and immune to listing-feed gaps.
- 01Repeat-sales method. Tracks the same properties over time, so new construction and luxury transactions don't skew the trend.
- 02Federally sourced. Built from GSE mortgage data — no MLS survey error, no commercial license required to publish.
- 03Slope, not level. Watch the slope of the line, not the absolute index value — a steepening curve is a more reliable buy signal than the level.
The rent ladder
HUD Fair Market Rent by bedroom count, sized against this metro's median household income and benchmarked vs Indiana and the U.S.
Typical 2-bedroom rent
$1,473
/ month · HUD FMR FY 2026
22.9% of median HHI
A typical 2-bedroom in costs the median household 22.9% of their income — 0.3 points below the U.S. average (23.3%) 1.1 points above Indiana (21.8%).
HUD calls anything above 30% "rent-burdened." This metro sits comfortably under that line, which means tenants can absorb modest rent increases — and landlords have headroom on rent hikes before pushing tenants out of the market.
Fair Market Rent — by bedroom count
| Bedroom | Monthly | Annual | % of median HHI | Verdict |
|---|---|---|---|---|
| 1 BR | $1,267 | $15.2K | 19.7% | comfortable |
| 2 BR | $1,473 | $17.7K | 22.9% | comfortable |
| 3 BR | $1,907 | $22.9K | 29.7% | moderate |
Why HUD Fair Market Rent matters
FMR is HUD's 40th-percentile rent estimate by bedroom count — refreshed every fiscal year, sourced from Census surveys (not commercial listing data), and used as the cap for Section 8 voucher payments. Three things investors should know:
- 01Defensible benchmark. Federal source, no commercial license required to publish or compare against.
- 02Section 8 ceiling. A property at or below FMR is voucher-eligible — government-paid rent at the FMR cap.
- 03Conservative estimate. 40th percentile means more than half of actual market rents in the metro come in higher.
Labor market direction
U.S. Bureau of Labor Statistics — LAUS (unemployment) + CES (nonfarm employment), benchmarked against the U.S. average.
Unemployment rate
2.5%
BLS LAUS · latest month
-1.2pp YoY change
1187K nonfarm jobs
Indianapolis's labor market is tight, with unemployment running at 2.5% — 1.5 points below the U.S. metros average (4.0%). The labor market has tightened 1.2 points over the last year — wages and rental demand both benefit from a tighter labor market.
For an investor, tighter unemployment means higher wages, more rental demand, and lower vacancy. The trend chart below shows how the metro's unemployment has moved over the last 30 months.
Unemployment rate
2.5%
-1.2 pp YoY
Nonfarm jobs
1187K
+0.11% YoY
Median household income
$77,065
ACS 5-year
How to read it
- 01Unemployment ranged 2.5%–4.4% over the last 30 months — consistently tighter than the national average.
- 02December 2025's 2.5% is the lowest reading in the entire window.
- 03Year-over-year improvement of 1.2 percentage points (from 3.7% in Dec 2024) is meaningful — the labor market is tightening, not loosening.
- 04Seasonal pattern visible: summer months tend to be a bit higher (3.5–4.4%), winter months tighter.
How to read the labor market
Two BLS series tell you almost everything you need about a metro's labor market: LAUS (unemployment, refreshed monthly) and CES (nonfarm payroll counts, refreshed monthly). LAUS is the tightness signal; CES is the size and direction signal.
- 01Unemployment is rental demand. Tighter labor markets mean higher wages and lower vacancy — landlords have pricing power when employers are competing for workers.
- 02YoY change is the trend signal. A negative pp YoY change means the labor market tightened over the last year — usually a leading indicator for rent growth.
- 03Nonfarm growth is supply absorption. Positive nonfarm payroll growth absorbs new housing supply and supports the rent + price trajectory together.
What's being built
U.S. Census Bureau, Building Permits Survey — trailing 12 months, broken out by structure type, with the YoY change as the directional signal.
Total permits TTM
12,460
Census BPS · trailing 12 months
+26.7% year-over-year
5.91 permits per 1,000 residents
Indianapolis pulled 12,460 building permits over the trailing 12 months, a meaningful jump 26.7% year-over-year. That works out to 5.91 permits per 1,000 residents, vs the U.S. metros average of 3.49.
Single-family vs multifamily mix matters: 5+ unit permits are lumpy (developers file for entire projects at once), while single-family permits are smoother and more reliable as a demand signal. The chart below breaks out the monthly mix.
Single family
9,260
trailing 12 months
2–4 unit
233
trailing 12 months
5+ unit
2,967
trailing 12 months
How to read it
- 01Single-family permits (teal) make the bulk of the pipeline — typically 600–1,000 per month.
- 02Multifamily 5+ unit permits (rust) are lumpy — they cluster in big monthly approvals as developers file for entire projects at once.
- 03December 2024 saw a 659-unit multifamily approval — one big project.
- 04January 2026's 554 multi-5+ permits is another large multifamily approval — the pipeline keeps refilling.
How to read the supply pipeline
Census BPS publishes building permit counts every month at the county level, by structure type. Single-family permits are the smooth signal — they reflect ongoing builder demand. 5+ unit permits are lumpy and project-level — one apartment approval can spike a month.
- 01Permits per 1,000 residents. The size-adjusted comparison number. Above ~5 means the metro is building meaningfully relative to its population; below 2 means supply is tight.
- 02YoY change is the direction. Year-over-year change in TTM permits tells you whether builders are leaning in or pulling back. Watch this number for trend reversals.
- 03Mix matters for cap rates. Heavy 5+ unit permitting tends to compress cap rates; single-family-dominated pipelines preserve them.
All 11 counties, ranked by population
Census Bureau (population, ACS demographics) + Census Building Permits Survey.
How to read it
- 01Hamilton (4,714) accounts for 38% of the metro's entire pipeline despite holding only 17% of the population.
- 02Hendricks (1,823, +63% YoY) is the fastest-growing pipeline.
- 03Marion (1,346) is the urban core — bigger by population but its permits are FALLING (–17% YoY).
- 04The pattern is unambiguous: growth is in the suburban ring, contraction is in the urban core.
How to read the map
- 01Darker teal = more permits per county. Hamilton (north of Indianapolis) is the darkest.
- 02The visual makes the urban-vs-suburban gap obvious: the suburban ring is shaded much deeper than Marion.
- 03Brown County (south, 61 permits) is the lightest — rural/recreational area, not in the growth path.
| # | County | Population | Median HHI | Home value | Permits TTM | YoY |
|---|---|---|---|---|---|---|
| 1 | Marion County | 971,737 | $63,450 | $207,000 | 1,346 | |
| 2 | Hamilton County | 349,527 | $117,957 | $379,100 | 4,714 | +23.6% |
| 3 | Hendricks County | 175,639 | $99,988 | $281,500 | 1,823 | +62.9% |
| 4 | Johnson County | 161,952 | $87,227 | $260,400 | 1,313 | +30.0% |
| 5 | Madison County | 130,545 | $62,632 | $147,700 | 190 | +17.3% |
| 6 | Hancock County | 80,170 | $91,326 | $258,100 | 1,155 | +16.2% |
| 7 | Morgan County | 71,757 | $79,088 | $220,100 | 360 | +25.0% |
| 8 | Boone County | 71,235 | $104,865 | $341,800 | 1,206 | +54.6% |
| 9 | Shelby County | 44,940 | $71,301 | $188,300 | 189 | |
| 10 | Putnam County | 36,942 | $76,182 | $205,800 | 103 | |
| 11 | Brown County | 15,513 | $72,644 | $242,500 | 61 |
Similar metros nationally
5 metros closest to Indianapolis by population and median household income — head-to-head on the metrics that matter for an investor.
Peer set
5
metros nearest by population + HHI
Best in 2 of 3 comparable metrics
Indianapolis is closest in size to Columbus, Kansas City, Cincinnati, Las Vegas. best in class on Cap rate proxy, Unemployment.
The table below ranks every metric — green cells mark the best value in the column, rust cells mark the worst. Indianapolis is highlighted as the focal row.
| Metro | Pop | Med HHI | Home value | P/I | Cap proxy | HPI 5y | Permits/1k | Migration | Unemp |
|---|---|---|---|---|---|---|---|---|---|
★Indianapolis | 2.11M | $77K | $244K | 3.17× | 4.7% | +53.0% | 5.91 | +0.02% | 2.5% |
Columbus, OH | 2.15M | $80K | $274K | 3.44× | 4.1% | +54.6% | 7.49 | -0.08% | 3.6% |
Kansas City, MO-KS | 2.20M | $82K | $265K | 3.24× | 4.0% | +51.8% | 4.09 | +0.00% | 3.5% |
Cincinnati, OH-KY-IN | 2.26M | $79K | $240K | 3.02× | 4.4% | +57.1% | 3.52 | -0.06% | 3.6% |
Las Vegas, NV | 2.29M | $74K | $401K | 5.43× | 3.4% | +52.3% | 5.80 | +0.44% | 5.2% |
Nashville, TN | 2.04M | $82K | $377K | 4.57× | 3.6% | +58.3% | 9.31 | +0.30% | 2.9% |
How to read this comparison
Peer metros are picked by population + median household income — the closest five matches nationally — so the comparison is apples-to-apples on size and economic class. Sun Belt entrants like Las Vegas and Nashville are included when they fall in range, which is why this peer set spans both the Midwest and the Sun Belt.
- 01Green = best in column. The cell with the most-favorable value for that metric, accounting for whether higher or lower is better.
- 02Rust = worst in column. The cell with the least-favorable value. Combined with the green markers, this is your at-a-glance "where does my metro win and where does it lose."
- 03Cap proxy is the yield lens. Cap rate proxy = (FMR 2BR × 12 × 0.65) ÷ median home value. A first-pass yield filter, not an underwriting number — but it puts the peer set on a single comparable scale.
Where people are moving in from
IRS Statistics of Income — Tax Year 2022. Excludes intra-metro suburban churn.
Net migration
+474
tax returns · IRS SOI · TY 2022
+0.02% of metro population
992 from top origin
Indianapolis is essentially flat on net migration — a tiny +474 return print (+0.02% of population) on a 2.1M metro is rounding error. Roughly 51K came in and almost the same number went out. The growth story rests on Hamilton County's permit acceleration, not on inbound migration.
The IRS data lags by ~2 years (households file taxes the year after they move), but it's the only nationwide county-to-county migration data sourced from administrative records, not survey estimates. The table below shows the top origin counties — the gravitational sources of new residents.
Top origin counties — where new residents are coming from
| Origin county | Tax returns |
|---|---|
| Monroe County, IN (Bloomington) | 992 |
| Cook County, IL (Chicago) | 972 |
| Delaware County, IN (Muncie) | 889 |
| Tippecanoe County, IN (Lafayette) | 747 |
| Bartholomew County, IN (Columbus) | 705 |
| Lake County, IN | 625 |
Who lives in Indianapolis
U.S. Census Bureau · American Community Survey 5-Year Estimates · 2019–2023 vintage.
Who lives here
- Median age
- 36.7
- Owner-occupancy
- 66.6%
- Bachelor's+
- 37.8%
Indianapolis relatively young Midwest metro: Median age 36.7, 66.6% owner-occupancy 37.8% holding a bachelor's degree or higher. Stable, educated, and mostly homeowner-driven.
The catch: 45.4% of renter households are rent-burdened (paying 30%+ of income on rent) — high enough to flag as a constraint on rent growth even though the headline rent-to-income ratio looks comfortable.
- Median household income
- $77,065
- Median age
- 36.7
- Bachelor's+ degree
- 37.8%
- Owner-occupancy rate
- 66.6%
- Vacancy rate
- 7.8%
- Rent burdened (30%+)
- 45.4%
Data sources
| Metric | Source | Type | Vintage |
|---|---|---|---|
| Home prices | FHFA — House Price Index | Index | Q4 2025 |
| Fair market rents | HUD — Fair Market Rents | Administrative | FY 2026 |
| Unemployment rate | BLS — Local Area Unemployment Statistics | Survey | Dec 2025 |
| Nonfarm employment | BLS — Current Employment Statistics | Survey | Dec 2025 |
| Building permits | Census — Building Permits Survey | Survey | Mar 2026 TTM |
| Migration flows | IRS — Statistics of Income, Migration Data | Administrative | Tax Year 2022 |
| Demographics | Census — American Community Survey 5-Year | Survey | 2019–2023 |
| Household income | Census — American Community Survey 5-Year | Survey | 2019–2023 |
Page last refreshed: April 9, 2026