Kelley Real Estate Outlook is a Joint Initiative of Indiana University’s Center for Real Estate Studies and the Indiana Business Research Center. The Outlook is a collection of articles highlighting increasing FHA mortgage defaults, the challenging imbalances facing builders, as well as the latest research.
According to Sara Coers, Associate Director, IU Center for Real Estate Studies, and Doug McCoy, Al and Shary Oak Director of the IU Center for Real Estate Studies, the Monitoring the Metrics section (highlighted below) features an article from Chris Hancock, CEO of the Builders Association of Greater Indianapolis, which discusses the imbalances builders are confronting in today’s market and why housing affordability is such a challenging issue.
Monitoring the Metrics
Building in an Unbalanced Market: A Homebuilder’s View on Demand, Development, and What’s Ahead
“New home construction across the country is facing significant headwinds as a number of factors challenge the industry, according to a survey by the National Association of Home Builders (NAHB). Builders are contending with a mix of persistent economic pressures and shifting buyer sentiment that make both planning and execution more challenging (see Figure 1). High interest rates remain the most critical concern, weighing heavily on affordability and dampening buyer demand. At the same time, rising inflation, labor and material costs, and the limited availability of developed lots continue to squeeze margins. Adding to these structural challenges, many potential buyers are choosing to wait, expecting prices or rates to improve, while uncertainty in Washington and negative media narratives further contribute to market hesitation. Together, these factors create a difficult environment for builders seeking to maintain momentum and growth.”
To view or learn more about the Housing Market Index (HMI) Survey released by NAHB in January 2025, click here.
Sources:
Kelley Real Estate Outlook: Fall 2025
HMI January 2025: Special Survey Report
Builders Association Indianapolis | Find a Home Builder & Remodeler | BAGI
https://www.ibrc.indiana.edu/realestateoutlook/2025/fall/index.html#outlook
https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics/hmi/special-survey-reports/hmi-january-2025-special-survey-report.pdf (graphic source)
https://www.bagi.com/
Updated: 11/11/25