SECOND QUARTER 1997:

INDIANA HOME PRICES UP 2.2 PERCENT; HOUSING MORE AFFORDABLE THAN LAST YEAR

NOTE: Tables showing complete data for most regions in the state, contact information for local Board of Realtors presidents and a full report are available from our office upon request. This will be the last release on state median home prices in this format, because funding for this study has been discontinued. The center will continue to examine state trends in home prices and expects to produce periodic reports. If you have questions, contact the Center for Real Estate Studies, phone 812-855-7794.

BLOOMINGTON, Ind. -- For the second straight quarter, national home prices rose at a much higher rate than most of those in Indiana, according to second quarter figures released today (Oct. 15) by the Indiana University Center for Real Estate Studies and the Indiana Association of Realtors.

The state's median home price rose by just 2.2 percent during the second three months of this year, a small increase when compared to a national jump of 8.0 percent for the same period. The 1997 figures were compared with home prices and housing affordability data for the same quarter a year ago.

The report also found that home ownership remains much more affordable for Hoosiers than for working people nationally.

"I would rather see an increase in home prices that is equal to or greater than the inflation rate, so that home owners are preserving the investment in their home," said Jeffrey D. Fisher, director of the IU Center for Real Estate Studies. "This is much better than having large increases in one quarter followed by decreases in the future quarters, as we've had in many areas of the country."

"We've had much more stability in our home prices, and these results indicate that we are continuing to maintain a rate of increase that should be sustainable," Fisher added.

The median home price for the state during the second quarter was $87,900, up from $86,000 a year earlier and up from $85,000 in the first quarter of 1997. The national median home price for the second quarter rose to $123,100 from $114,000 over the same period.

Nearly half of the cities and regions in Indiana that were studied had increases in median home prices of 5 percent or more. They included Northeast Indiana, which posted the highest rate of increase, 21.2 percent; and Marion, which reported a 10.2 percent increase. Also posting a double-digit increase was Boone County, which saw its median home price go up by 14.4 percent.

Indiana's housing affordability index in the second quarter of 1997 rose from 168 a year ago to 174. Housing remains far more affordable in Indiana than in the rest of the nation -- the national HAI fell from 133 to 125.

What this means is that with an index of 174, a family with the median income of $42,742 can afford to purchase a home costing $152,946, or 74 percent more than the median-priced home. The HAI is calculated assuming an 80 percent mortgage and is based on requirements of the Federal National Mortgage Association, which limits loan payments to 25 percent of income.

The first-time home buyers' index rose slightly to 124 in the second quarter from 115 a year earlier. The affordability gap between first-time home buyers and home buyers overall was 29 percent in Indiana.

During the second quarter, data was collected on 12,563 single-family home sales throughout Indiana. The dollar value of these sales was $1.29 billion. Interest rates averaged 7.91 percent for the quarter.

Out of 20 major cities and regions studied in depth, 16 experienced gains. The four cities or areas that experienced decreases were Jasper, with a decline of 11.7 percent; Richmond, a drop of 8.1 percent; Anderson, a decline of 5.3 percent; and South Bend, a drop of 2.3 percent. Hamilton County, which is factored into Indianapolis' statistics, had a decline in median home price of 4.4 percent, but continued to post the highest median home price in the state, at $143,950.

Overall, the Indianapolis metropolitan area had a 2.8 percent increase in its median home price, which was $104,900 in the second quarter. But in Boone County, the median home price rose by 13.4 percent, to $128,000. Other counties in the Indianapolis MSA had increases ranging from 0.0 percent in Morgan County to 5.0 percent in Johnson County.

The second-quarter median home prices and HAIs for the 20 regions in the state were: Greater Northwest Indiana, $102,000, 160; Michigan City-LaPorte, $79,900, 184; South Bend-Mishawaka, $70,000, 220; Elkhart-Goshen, $85,000, 189; Fort Wayne and region, $85,565, 192; Lafayette, $103,225, 151; Kokomo, $71,000, 231; Marion, $55,000, 254;

Anderson, $70,000, 210; Muncie, $69,900; 203; Terre Haute-Vincennes and region, $61,800, 209; Indianapolis and region, $104,900, 167; Bloomington, $114,000, 130; Columbus, $112,250, 150; Southeast Indiana, $94,000, 152; Evansville, $80,950, 183; Jasper, $70,000, 230; Northeast Indiana, $75,000, 201; Warsaw-Kosciusko County, $81,500, 190; and Richmond, $62,000, 213.

The center calculated separate second-quarter median home prices and HAIs for these other counties: Brown, $81,000, 190; Cass, $54,400, 254; Fayette, $70,950, 181; Fulton, $48,500, 274; Greene, $49,500, 247; Henry, $64,900, 212; Huntington, $70,250, 206; Lawrence, $62,750, 212; Marshall, $73,750, 199; Miami, $40,000, 315; Montgomery, $69,900, 202; Washington, $48,200, 256; and White, $72,500, 189.

In the Indianapolis metro area: Boone, $128,000, 145; Hamilton, $143,950, 231; Hancock, $115,000, 159; Hendricks, $119,950, 159; Johnson, $113,300, 160; Marion, $93,250, 169; Morgan, $99,200, 163; and Shelby, $78,000, 191.

Median home prices are revised quarterly as additional data becomes available. National figures are provided by the National Association of Realtors.

For more information, contact George Vlahakis, Office of Communications and Marketing, 812-855-0846 or 812-855-3911, gvlahaki@indiana.edu

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