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Market Report

Indianapolis Multifamily Market

3Q 2023

Effective Rents in Indianapolis are Poised to
Climb by a Nationally-Accelerated Pace in 2023

Below-average vacancy sustains rent momentum. Property metrics are far outperforming market standards in Indianapolis, putting average effective rent growth in 2023 on track to tie as the highest among major U.S. metros. Despite the multifamily sector’s recent challenges, including the net relinquishment of roughly 3,540 units over the 12-month span ending this March, the overall vacancy rate of 5.8 percent in June was 160 basis points below the long-term average. Low levels of availability across the metro facilitated effective rent growth at more than twice the historical pace. Such fundamentals provide a strong base for operators moving forward, especially before 1,890 units are delivered in the second half. This volume, which is slated to exceed both the entirety of 2021 and 2022, will outpace positive but modest net absorption, applying upward pressure on vacancy near-term. Rent growth will soften from last year’s clip as a result, although gains will still stand out nationally. 

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