The study, Metrostudy's first in Indianapolis, found an oversupply of houses and construction starts in the second quarter. The region in the second quarter generated 3,024 single-family starts-175 more than the number of closings during the period.
Moreover, a two-year supply of vacant developed lots was on inventory as of June.
"Indianapolis is experiencing what many other markets are experiencing nationally-an oversupply of homes on the market, Dax Meredith, director of Metrostudy's new Indianapolis division, said in a statement.
"Potential buyers are waiting to see what will happen-week after week-as builders continue to discount and offer incentives to buyers."