For today’s home buyers, the “American Dream” is just that – elusive and even fantastical. Like striding towards a goal in a sleep state, achieving ownership always seems just out of reach. As soon as we think we can grasp it, that we’re running fast enough, it slips further away.  

Declining affordability is a major hurdle to attainable housing, and even with record-high wages in the Indianapolis metro region, more and more Hoosiers are priced out of the market. What do the numbers say? 

Increased Earnings Eclipsed by Higher Home Prices and Mortgage Rates 

It’s true: We are earning more than we did a decade ago. According to the Common Sense Institute (CSI) Indianapolis Metropolitan Area Housing Affordability Report, the average wage rate in 2012 was $22.53/hour. By 2023, that had climbed to $29.34. To be clear, this is significantly higher than the national averages in both time periods. 

But these numbers do not tell the whole story. According to the CSI’s “Indianapolis Metro Area Homebuyer Misery Index,” which is based on 30-year mortgage rates and Zillow home price data, beginning in 2021, home prices skyrocketed and mortgage rates more than doubled by fall of 2022. From early 2021 to the fall of 2022, the cost to buy an average-priced home increased by a jaw-dropping 58%. Turns out the Misery Index is quite an apt name. 

How Many Hours Do You Need to Work to Afford a Mortgage? 

Let’s do the math on this. In 2013, the number of hours that a home buyer would need to work at the average wage rate to afford a monthly mortgage payment was 29.58. Over the next few years, this figure started creeping up into the 30’s, hitting a high of 37.13 in 2018. Following a brief dip over the subsequent three years, the average worker found themselves in a position of having to work 58.17 hours to be in the running for a home in 2022. 

Did you figure out how to add another 10, 20, 30 hours to your week? We can’t make more land – and we certainly can’t create more time in our already jam-packed lives. 

Is it enough?  

In a word: No. Along with high prices, high demand, and high mortgage rates, we have severely low housing stock. Indiana is not building enough new housing to accommodate demand – much less to account for the influx of people that a projected 275,000 new jobs will bring to the area over the next two decades. 

According to researcher and economist Enrico Moretti, for every one new “good job,” five additional jobs are created. Of these, three are nonprofessional occupations (e.g., retail clerks, restaurant servers).  

This means that of the 275,000 new positions, the majority will be below median. This also means that fewer hard-working Hoosiers – who are essential to both the economy and character of the region – will be able to afford to purchase a house. It is not a matter of working harder, working more, pulling oneself up by the bootstraps. There simply aren’t enough hours in the day.  

What’s Next?  

The American Dream is slipping through the fingers of millions of Indiana households. These are people who want to lay roots, contribute to their communities monetarily and socially, and who are vital to the future of our towns and cities. No matter how fast they run, the goal – the dream – is just out of reach. 

This need not be the case. Advocating for achievable housing is advocating for equitable, balanced policies that put our communities first. With increased homeownership, with increased access, we all win.  

Learn how – and how you can join the conversation. Visit Build Indiana Roots.