Real Estate Radar: Why Indianapolis is an Ideal Market for First-Time Home Buyers

Indianapolis is routinely ranked as one of the best places to find a first home, and for good reason. This Midwest powerhouse boasts a vibrant economy, flourishing urban neighborhoods and suburban developments, and an affordable cost of living.

“Indianapolis provides a great balance between affordability and opportunity, which is exactly why we have so many first-time homebuyers looking in our area,” says Angel Hensley, an AVP and mortgage sales manager with Old National Bank.

The city’s wide range of housing opportunities offers something for every buyer. But Angel notes that the market is competitive: Buyers who are prequalified for mortgages, understand the right price point for their budget, and leverage local lending and real expertise have an advantage.

Midwest momentum

The appeal of the Indianapolis job market includes a lower unemployment rate than the national average and higher wage growth. In fact, the Indiana Business Research Center predicts that economic activity in the Indianapolis region will outpace GDP growth across the rest of the state and country.

The region's longstanding manufacturing sector can take some credit, with household names such as transportation equipment maker Rolls-Royce and pharmaceutical giant Eli Lilly, the region’s largest private employer. Eli Lilly has invested $9 billion into its manufacturing facility in Lebanon, Indiana — about 30 miles northwest of downtown Indianapolis.

However, manufacturing muscle is just part of Indy’s economic strength. The region also has a bustling healthcare and life sciences sector, anchored by Indiana University Health, a non-profit health system partnered with the Indiana University Medical School. “We see many people moving here for opportunities in the healthcare market,” Angel says.

In addition, job seekers are finding employment in financial services, logistics, and technology companies. Finally, the city’s major event business has been booming; Indianapolis hosted 550 events in 2024, including the Taylor Swift Eras Tour, the NBA All-Star Weekend, and the U.S. Olympic Swimming Trials.

The real estate reaction

Economic growth and the region’s relative affordability are why Zillow deemed Indianapolis the second hottest home market in 2025. (The hottest is Buffalo, New York.) At the start of the year, more than 40% of the metro area’s listed homes were priced under $236,000, making the city especially attractive to first-time homebuyers.  

“While it has become more competitive, Indianapolis is still a budget-friendly place for people looking to enter the real estate market,” Angel says.

The region offers a variety of housing options, from walkable urban neighborhoods within Indianapolis to suburban developments to commuter-friendly small towns just off Interstate 465. “There are so many cute areas — the kind of places that when you go on vacation, you can’t wait to walk downtown to check out the shops and restaurants,” she says.

Looking ahead, many anticipate that Indianapolis home prices may increase, though likely not more than 10%, as they did in 2021 and 2022. The supply of homes on the market may also grow, giving buyers more options. “While I think there’s no rush, acting sooner rather than later may help buyers who plan to purchase this year,” Angel says.

4 tips for finding a home in Indianapolis

Finding success in a competitive market means doing your homework. A little preparation can ensure you understand what you can afford, where you want to buy, and how to make your offer as competitive as possible. Angel offered the following tips to help first-time homebuyers find success in Indianapolis:

1. Partner with a local lender. An experienced lender can help you determine a monthly mortgage payment that makes sense, and find grants and other first-time homebuyer programs that increase your buying power. What’s more, connecting with a lender at a local bank ensures you’re working with someone who understands the Indianapolis market, has connections with local real estate agents, and can provide additional insights for buying a home there. “When you’re working with a local lender, you have someone you can call or visit when you have questions,” Angel says. “That gives buyers a real edge.”
2. Get prequalified for a mortgage. Going through the prequalification process provides a host of benefits. It allows you to identify any financial or credit issues that could affect your loan process. You also come away with an estimate of how much you can borrow. That empowers you to shop for homes within your price range, and to be ready to make an offer as soon as you find one that fits your needs and budget.
3. Explore down payment assistance and loan options. First-time homebuyers have access to financial tools that can make homeownership more accessible. For example, Old National Bank’s Down Payment Assistance Program provides financial assistance on a down payment. There are also loan and grant programs for veterans, buyers purchasing homes in rural areas, and those working within specific fields, such as law enforcement, public safety, healthcare, and education. “These loans open up homeownership to many different people,” Angel says.
4. Find the right neighborhood. Every buyer has different wants and needs, whether being close to work, having more outdoor space, or living in a specific school district. For example, first-time homebuyers in Indy might look in Fountain Square or Mass Ave. if they want restaurants and nightlife. Irvington offers historic homes and more green space, while still being close to downtown. Farther out of the city, Angel notes, Fishers, Carmel, and Noblesville provide great schools and a small-town feel. Knowing where you want to be and how far your money will go in each area can make the buying process easier and more efficient.

Finding a home in Indianapolis

A growing economy and affordability make Indianapolis a prime destination for first-time homebuyers. Connect with Indianapolis real estate agents and the mortgage team at Old National for help finding a home in this dynamic Midwest city.

Interested in learning more about how Old National Bank can help you buy a home in Indianapolis? Contact our mortgage team today.