INDIANAPOLIS — The price of rent spiked after the pandemic and has not truly come back down since. Another spike could be on the way if tariffs continue to impact the economy.
"With all of the uncertainty in the economy, renting is more flexible. If you lose a job, it's easier to get out of a lease than it is to sell a home," said Daryl Fairweather of Redfin. "That added demand will put a lot of pressure on rents and I think next year we'll start to see rent going up again."
According to Redfin's latest report, the average asking price for rent in central Indiana is now $1,406 a month, a 1.3% increase from this time last year. The national rent asking price slightly decreased in that time, but nearby cities such as Chicago, Cincinnati, and Louisville all experienced more dramatic price increases than Indianapolis.
The reason for the rise, according to Fairweather, is not enough supply for the demand.
"Prices are declining in parts of the country where there has been a lot of new construction," Fairweather said. "They are rising in places that have not had as much construction, but have still had strong demand."
Butler University economics professor William Rieber said the constant threat of tariffs could raise prices due to builders second-guessing new housing developments.
"The key word here is anxiety," Rieber said. "How do you make a long-term commitment to build a home, apartment complex, or condominium when you're not sure what the tariffs on imports will be like lumber, steel, or aluminum?"
Indianapolis rent remains a bargain compared to the rest of the country. Redfin reports the national average rent asking price is $1,610, $200 more expensive than Indianapolis.
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