INDIANAPOLIS (WISH) — Indiana’s single-family housing market saw a slowdown in June 2025, with building permits falling by 13% compared to May, according to new figures from the U.S. Census Bureau.

In total, 1,811 single-family building permits were issued across Indiana last month, down from 2,048 permits in May. The decline also marks a 6% drop from the same time last year, when 1,921 permits were issued in June 2024.

“This slowdown aligns with national trends. Single-family permits, construction starts, and new home sales are all down on a year-to-date basis nationally,” said Rick Wajda, CEO of the Indiana Builders Association, in a statement responding to the latest data.

Industry leaders point to higher borrowing costs, elevated interest rates, and affordability challenges as key factors behind the cooling market for new single-family homes both in Indiana and nationwide.

However, the news isn’t all negative for Indiana’s housing sector. Despite June’s dip, year-to-date permit numbers for 2025 are still up 3% over the same period last year, with 10,319 single-family permits issued so far, indicating that overall demand remains relatively steady.

The Hoosier State also continues to stand out as a regional leader for new home construction. Indiana is still outpacing other Midwestern states like Ohio, Michigan, Illinois, and Kentucky in new single-family housing starts — a sign that the state’s builders and developers are maintaining momentum despite tighter economic conditions.

Local builders say steady population growth, job creation, and demand for affordable housing options are helping sustain activity in many Indiana communities, even as interest rates remain higher than pre-pandemic levels.

“Indiana’s market fundamentals remain strong, and we’re still seeing solid demand in many local communities,” Wajda noted.

Housing analysts say they’ll be watching closely to see whether new permits pick back up in the second half of 2025, as the Federal Reserve’s interest rate strategy and broader economic trends continue to shape buyer confidence.

Meanwhile, builders across Indiana are adapting by offering more flexible design options, smaller floor plans, and incentives to attract buyers navigating tighter budgets and higher mortgage rates.

The Indiana Builders Association says it will continue to track monthly trends while working with policymakers to support a healthy homebuilding climate across the state.

Originally reported by WISH-TV in WIBC.