Area homebuilders hope for better year after 2022 slump

Area builders suffered through a big drop in demand for new homes in 2022, capped by a dismal fourth quarter.

Builders in the nine-county Indianapolis area filed 7,992 single-family building permits last year, down from 10,430 in 2021—a decline of 23%, according to the latest statistics from the Builders Association of Greater Indianapolis.

Last year’s total was the lowest since 2019, when 6,968 permits were filed.

The scope of the slowdown didn’t surprise the industry, which had a tough time following its busiest year since 2005 amid escalating mortgage rates and rising inflation.

Area builders filed just 385 permits in December, a decline of 54% from the same month of 2021. Permit filings have fallen on a year-over-year basis for the past 12 months and in 15 of the past 17 months. December’s year-over-year percentage decrease was the largest in any month this year, following a 50% drop in November and a 46% decline in October.

Steve Lains, CEO of BAGI, said builders expect the market to stabilize later this year.

“While we have and continue to face challenges, we remain confident that this slowdown is not a recession, but a correction–a change in the market that will see price growth slowing, a continued stable supply of new homes, and increased product/labor availabilities,” Lains said in written remarks. “This, in turn, should provide greater opportunity for hopeful Hoosiers to obtain their goal of owning a home.”

County numbers

– Marion County was the only area county to see a year-over-year increase in single-family building permit filings. Filings in the county rose from 1,269 in 2001 to 1,287 in 2002, an increase of 1%. December was a strong month for the county, with filings rising from 55%, to 82.

– Hamilton County, typically the busiest area county for home construction, saw filings sink 57% in December, from 268 to 116. For the year, filings were down 29% in the county, to 2,378.

– Hendricks County’s numbers fell 31% in 2022, to 962.

– Hancock County saw a 24% drop in filings last year, to 935. December filings fell 83%, from 176 to 30.

– Johnson County experienced a 24% decrease in filings last year, to 774.

– Filings dropped 10% in Boone County last year, to 719.

– Madison County filings were down 23% in 2022, to 523.

– Morgan County filings sank 24% last year, to 289.

– Shelby County saw a 31% drop in filings last year, to 125.