Area builders still seeing rising demand for homes, but pace is slowing

The good news for Indianapolis-area homebuilders: Applications for new houses were up in October, marking the 13th straight month of increases.

The bad news: Builders saw the smallest monthly increase in applications in the past year, and six of the area’s nine counties saw declining permit filings, according to the Builders Association of Greater Indianapolis.

Builders filed 563 single-family construction permits in the area last month, a 2 percent increase over the 550 filed in October 2017, according to the latest numbers from the BAGI.

“While we are not worried about the pace of permits currently, we are definitely continuing to see an affordability issue that we believe is the primary cause for last month’s stalling,” Steve Lains, CEO of BAGI, said in a written statement. “Between rising mortgage rates, continued labor and lot shortages, and the high costs of lumber and other materials, it is difficult for homebuilders to provide the type of product that much of our market demands.”

On a year-to-date basis, permit filings are up 17 percent, from 5,258 in the first 10 months of 2017 to 6,133 during the same period this year. Builders are just 65 permits shy of last year’s total with two months left in the year, putting them on pace for their best year since 2007.

County numbers for October

Hamilton County led the area in permit filings last month with 239, an increase of 45 percent over October 2017.

Marion County saw a 17 percent decrease in October, from 111 to 92. Filings are up 27 percent so far this year in the county compared to the same time period of 2017.

Morgan County saw a 47 percent increase in filings, to 22. Filings were flat in Madison County, at 14.

Permits were down 5 percent in Johnson County, to 54. They fell 39 percent in Hancock County, to 35.

Hendricks County received 68 filings, a decrease of 22 percent.

Filings dropped 3 percent in Boone County, to 28.

Filings fell from 16 to 11 in Shelby County.