Housing market study
The metro needs 140,000 homes by 2035, closer to its centers and in more kinds of buildings.
Central Indiana is growing, and Indianapolis is getting less of it. The 11-county metro holds a third of Hoosiers, produces about 40% of the state’s economic output and drew 62% of its population growth since 2020. Marion County, with half the metro’s homes, permitted 17% of its new ones. This independent Proformus study reads the metro through six lenses to show where demand is heading, where homes are going, and what it takes to build them in the right places.
- Geography
- 11 counties, 391 census tracts
- Method
- Six lenses, from people to policy
- Deliverables
- Report, tract model and scenario explorer
- Published
- October 2026, version 1.1
At a glance
2.21M
people in July 2025, up 112,900 since 2020: 1.06% a year, double Indiana’s pace
881K
households in 2025; average household size fell from 2.57 to 2.49 in five years
11,900
homes permitted a year in 2023–25, down from 13,400 in 2022; 2026 is pacing near 13,300
140K
homes needed by 2035 in the base case, about 14,000 a year (range 104K–177K)
+52%
home prices from 2020 to 2025, against +25% for average pay
−0.25
growth alignment index: 2010–23 homes leaned away from walkable, village-like tracts
Sources: Census PEP V2025, ACS, Census Building Permits Survey, FHFA HPI, DWD/BLS QCEW; Proformus analysis.
Executive summary
Six findings
Demand is outrunning production, and what does get built is landing at the edge, in one kind of house. The gap is widest in Marion County.
- 01
Demand: 140,000 homes
About 14,000 a year in the base case, 17% more than the 11,900 a year permitted in 2023–25. Range: 104,000 to 177,000.
- 02
Households: smaller and older
Since 2014, householders 65 and older made up half of household growth; 82% of added households had no one under 18, and 35% were people living alone.
- 03
Price: homes outran pay
Prices rose 52% in 2020–25, pay 25%. 38% of the homes needed are for households earning under 80% of the area median.
- 04
Place: growth went to the edge
The 200 center tracts hold 42% of homes but got 21% of new ones in 2010–23; 69% went to the two least village-like fifths of tracts.
- 05
Marion: building half its need
Marion needs about 3,880 homes a year and permitted 1,910 a year in 2023–25. Hamilton permitted 4,520 against a need of 3,800.
- 06
Types: a missing middle
72% of homes permitted in 2023–25 were one-unit houses, townhouses included; 2.3% were in 2–4 unit buildings.
What to do
Build village-first.
Aim growth at the centers, give Indianapolis a number to hit, and use the zoning reviews the state now requires.
- 45%of new homes aimed at the 200 center tracts
- 3,900 a yeara production target for Marion County
- Jan. 1, 2027zoning-review hearings due in every city, town and county: legalize plexes, rowhouses, ADUs and small lots
The village idea
A village is a center you can live in.
A village center is the place: walkable blocks with a cluster of everyday, mostly independent businesses. The study scores every census tract on the ingredients below to find where those places are today, and where they could be.
Walkability
Short blocks and connected streets that are easy to walk.
Retail
Shops, cafés and services within a few minutes’ walk.
Good schools
A strong school district within reach of home.
Amenities
Parks and civic anchors nearby, places to go on foot.
The fifth ingredient is homes. They are set by zoning, the policy lever this study is about.
How we score it
The Urban Place Score
Every one of the metro’s 391 census tracts is ranked from 0 to 100 on three measures. Its Urban Place Score is the average of the three: how ready the place is to grow as a village.
Four kinds of places, by average score
Established village61 tracts · street grid and storefronts
67Carmel and Noblesville 92 · Mass Ave 69 · Irvington 57
Strip node70 tracts · storefronts, weak grid
61Brownsburg Main Street 80 · Keystone at the Crossing 66
Latent village69 tracts · street grid, few storefronts
50Plainfield and Lebanon 73 · Haughville 53
Not a center191 tracts · neither
41Avon (US 36) 51 · Lawrence (Fort Ben) 43
Types use street grid and storefronts only: a tract in the top third on both is an established village. The score adds schools, so a type and a score can differ. Scores use 2010 data and may understate newer centers and small-town squares. Places are the tract holding each main street. Sources: EPA Smart Location Database v2 (2010); Stanford SEDA 6.0; Proformus.
Where to build
45% of new homes in the 200 centers, and the edge built as villages.
Village-first sends each county’s new homes to its center tracts first, weighted toward the bigger, readier ones, with no center growing more than half. The edge still grows the most; the aim is to build it as villages.
Where new homes go, by kind of place
2010–23, as built99,300 homes
2025–35, village-first128,000 homes
Marion’s centers
20,000 homes, 2025–35
Main streets, latent villages and BRT stations: plexes, rowhouses, homes over shops.
Suburban centers
37,900 homes, 2025–35
Carmel, Fishers, Greenwood, Anderson, Plainfield, Greenfield and more; 18 reach the growth cap.
Edge growth areas
55,500 homes, 2025–35
Still the largest share, led by Hamilton, Hendricks and Marion’s outer edge: build them as villages.
Everywhere else
14,600 homes, 2025–35
Gentle infill on existing streets, plus scattered rural growth.
Homes placed 2025–35 under village-first, base case (128,000 in all), by 2010 census tract. Source: Proformus tract allocation. Try other scenarios below ↓
How the study works
Six lenses, from who is coming to what policy can change.
Each lens answers one question with public data. The first four feed the projection, and the projection sets the policy agenda.
- 01PeopleWho is coming, and how will they live?Population, migration, households, jobs
- 02ProductionWhat gets built, and where?Permits by type and county, tract change
- 03PriceWhat does it cost, and who is priced out?Values, sales, rents, wages
- 04PlaceDoes growth land where places can carry it?Village types, schools, growth alignment
- 05ProjectionHow many homes, by when, and where?Three scenarios to 2035, county and tract
- 06PolicyWhat moves the numbers?Zoning, parking, transit, schools, targets
Geography: Boone, Brown, Hamilton, Hancock, Hendricks, Johnson, Madison, Marion, Morgan, Shelby and Tipton counties.
Scenario explorer
Where should the next 128,000 homes go?
Pick a growth pattern and a demand case. Every census tract and town recomputes from the study’s model. Tap any place on the map to see what it gets.
New homes for about 318,800 people. Because households keep getting smaller, the metro grows from 2.21 million to 2.41 million people by 2035.
Growth pattern
Recent trend keeps each county’s 2023–25 share of permits and sends homes where they went in 2010–23, with a fifth spread as infill across every tract. Switch to village-first to use the sliders.
Housing demand, 2025–35
Village type, by street grid and storefronts (2010)
Loading the map…
Hover or tap a tract or town to see its homes today and what each pattern adds.
In village centers
45%
In Marion County
33,300
Growth alignment index
Runs from −1 to +1 with tracts ranked by village form. Below zero, new homes favor places with weaker street grids and fewer storefronts. In 2010–23 the metro scored −0.25.
Share of new homes by place type
This scenarioRecent trend
Cities & towns with the most new homes
This scenarioRecent trend
New homes and population by county
| County | New homes | People in new homes | Population 2025 | Population 2035 | In centers | Recent trend |
|---|
A scenario, not a forecast. Homes are placed across 391 census tracts (2010 boundaries) from each county’s modeled 2025–35 need, scaled to the tract sample (128,000 of the 139,700 base need). Outside the centers, a fifth of each county’s new homes is spread in proportion to the homes a tract already has (backyard homes, lot splits, rebuilds), so every tract adds some; the rest follows where homes went in 2010–23. County totals, center shares and the growth alignment index match the report; tract figures outside the centers differ slightly, because the report follows 2010–23 gains alone. Village types and readiness use street grids and storefront jobs (EPA Smart Location Database) and school achievement (SEDA 6.0). Town figures split each tract by the share of its land inside the town (Census places, 2019 boundaries) and are approximate. Three tracts outside the sample are shown in gray. People in new homes = new homes × 2.49, the metro’s 2025 average household. Population starts from the Census estimates for July 2025 by county (2.21 million in all), split among tracts and towns by their homes, and reaches the study’s 2035 projection for the demand case chosen (2.36, 2.41 or 2.46 million), with every home in a county holding the same average number of people. Households keep getting smaller, and some new homes replace lost ones or fill vacancy, so new homes add fewer people than they house: places that add few homes can lose population. Source: Proformus, Indy Metro Housing Study, October 2026.
02 · Production
Hamilton took 38% of permits. Marion, with half the homes, took 17%.
Since 2020 the metro’s new homes have gone to its five fastest-growing suburban counties, far out of proportion to the homes they already had.
Homes vs new homes, by county
Marion
Hamilton
Hendricks
Johnson
Hancock
Boone
75%
of 2020–25 permits went to Hamilton, Hendricks, Johnson, Hancock and Boone, which held 37% of homes
36% vs 12%
Hamilton’s and Marion’s shares of 2025 permits
1,342
homes permitted in Marion in 2025, the fewest of the six years
Shares of 2020–25 permits (73,325 homes) and of 2020 Census homes (885,343). Madison, Morgan, Shelby, Brown and Tipton not shown. Sources: Census Building Permits Survey; 2020 Census; Proformus.
05 · Projection
Marion needs twice what it builds.
Need follows where households form. Production follows where land and zoning allow. The gap between them is a policy choice: Hamilton builds ahead of its base need while Marion permits about half of its own.
13,970
homes needed a year across the metro, 2025–35 (base case)
11,910
homes permitted a year, 2023–25
1,970 a year
Marion’s shortfall, the largest of any county; Madison is next at 540
Sources: Census Building Permits Survey (2023–25 county average); Proformus demand model. Rounded.
03 · Price
38% of the homes needed are for incomes under 80% of median.
Prices rose 52% from 2020 to 2025 while pay rose 25%. The homes being built since 2020 serve households near or above the median, while much of the need sits well below it.
Homes needed 2025–35 by household income, as a share of area median
Under 30%
30–50%
50–80%
80–120%
Over 120%
$1,684
median rent of homes built since 2020, affordable at about 72% of the area median
$430K
median value of homes built since 2020, which needs about 136% of the median at August’s 6.67% rate, and 144% at October’s 7.40%
63,900
renter households pay half or more of their income on rent, 43,600 of them in Marion
Need split by each county’s 2020–24 mix of households by income and tenure; bands use HUD FY2026 income limits for a 2.5-person household. Sources: Proformus demand model; ACS 2020–24; HUD; Zillow.
04 · Place
Four kinds of places, four fixes.
Every tract is typed by its bones (walkable intersections) and its life (storefront jobs). Villages pay their way; the edge does not.
262 fewer milesof new local street, built village-first
About $38M a yearless to keep up (illustrative)
-
Established village
Add homes around the main street
124% of its cost covered by its taxes
20,300 homes village-first vs 7,700 on the recent trend
- 3–5 story mixed use by right on main streets
- Rowhouses and 2–4 unit buildings within a 10-minute walk
- No parking minimums
-
Latent village
Add life, then homes
49% covered; 77% with 2–4 homes a lot
12,100 homes village-first vs 3,100 on the recent trend
- Corner shops, cafés and live-work by right
- 2–4 homes by right on lots of 2,800 sq ft or more
- Land-bank lots with permit-ready plans; invest in schools
-
Strip node
Add bones
117% of its cost covered by its taxes
25,500 homes village-first vs 16,800 on the recent trend
- Homes by right on commercial lots and surplus parking
- New streets and short blocks when big sites redevelop
- Shared parking instead of minimums
-
Not a center
Seed future villages
83% covered in a cul-de-sac subdivision
70,100 homes village-first vs 100,400 on the recent trend
- Lots under 5,000 sq ft and ADUs by right
- Connected streets, not cul-de-sac-only plats
- A walkable center in big new plans
Share of its cost to serve that a place pays in taxesWith 2–4 homes a lotBreaks evenCountywide, 81%
Fiscal ledger: city and county property and income taxes against the cost of streets, police, fire, trash and parks, measured in real Marion County places (2026 rates and budget). Compare the types with each other and with the countywide 81%, not with 100%. Readiness averages street grid, storefront and school rankings (0–100). Homes are 2025–35 placements from the study’s tract model; street miles assume new local street for homes outside the centers. Sources: City of Indianapolis GIS; DLGF; 2026 city-county budget; HNTB for DPW; EPA Smart Location Database; SEDA 6.0; Proformus.
On the ground
The same street, today and with the reform.
Six fixes, drawn at real lot sizes. Pick one, then drag across the drawing to compare. Gold marks the homes each reform allows.
Today
With the reform
Illustrative massing, not site plans. Apartment counts assume about 1,000 sq ft per home. Lot rules from the Indiana REALTORS Zoning Library (July 2026), checked against municipal codes in October 2026; codes change often. Source: Proformus.
What to build
More kinds of homes, especially in the middle.
The recommended mix keeps apartments near their recent share and asks for far more plexes, rowhouses, smaller lots and backyard homes. It is a planning target, not a forecast.
Share of new homes by building type
Houses, on their own lots or in rows
Backyard homes (ADUs)
2–4 homes in one building
Buildings of 5 or more
The 128,000 homes placed, by type
- Large-lot house24,500
- Rowhouse23,700
- Smaller-lot house23,600
- Homes over shops23,000
- Plex (2–4 homes)18,500
- Small apartments (5–19)8,300
- Backyard home (ADU)6,300
Planning targets by place type, applied to the village-first placement of 128,000 homes (base case); rounded. The Census permit survey counts rowhouses as one-unit homes and does not report ADUs. Sources: Census BPS; Proformus.
06 · Policy
Six levers to build more homes, closer to centers.
Most of the tools already exist. The state has started a clock, the transit lines are running, and the market is offering an opening.
- 01
Use the state’s zoning review
HEA 1001-2026 requires every county, city and town to hold a zoning-review hearing by Jan. 1, 2027. Adopt plexes, ADUs and smaller lots in center tracts first.
- 02
Finish parking reform
A proposal to repeal Indianapolis’s parking minimums countywide was tabled pending a city parking study. Finish the job.
- 03
Build on transit
The Purple Line opened in 2024 and the Blue Line is due in 2028. About 46,000 homes sit within a half mile of Red and Purple Line stations; zoning there decides whether the lines carry more neighbors.
- 04
Pair homes with schools
New homes leaned toward higher-scoring school districts. Align the new school authority’s plans with village growth.
- 05
Give Indy a housing target
No citywide production target exists. Adopt about 3,900 homes a year and report it in the state’s new annual housing reports from 2027.
- 06
Grow suburban centers
Hamilton already builds at its high-case pace. Steer that volume to its centers: Carmel, Noblesville, Westfield and Fishers.
Work with us
Need a housing study for your community?
We build the same model for cities, towns, counties and the organizations that serve them.
Demand at the scale you planBy tract, parcel or neighborhood, tailored to your community and tested in scenarios
Placement by tractVillage-first and recent-trend patterns
The fiscal ledgerWhat each kind of place pays and costs
Zoning fixes by place typeChecked against local codes
A scenario explorerOne your residents can use, like the one above
A yardstick, not a forecast or a feasibility study. Regression results are associations, not causal estimates. Data: Census PEP V2025, ACS, Building Permits Survey; FHFA HPI; Zillow ZHVI and ZORI; Freddie Mac PMMS; DWD/BLS QCEW and OEWS; Indiana REALTORS; EPA Smart Location Database; Stanford SEDA 6.0; HUD; City of Indianapolis GIS; DLGF; 2026 city-county budget; HNTB for DPW.