Indianapolis’ tailwinds: Why steady growth makes it a compelling market

In a cycle that punishes speculative bets and rewards patience, Indianapolis is quietly building the kind of multifamily investment case that deserves a closer look. Hallmarks of the Indianapolis metro are a contracting supply pipeline, rent growth that continues to outpace the national average, relative rent affordability with room to run, and population momentum and job creation that show no sign of stalling.

This isn’t a story about one good quarter. Indy belongs in the conversation for investors across the risk spectrum, from core to value-add. Indianapolis is a market with solid fundamentals that decisively endure interest rate volatility, geopolitical factors, and other economic headwinds.

A shrinking pipeline is resetting the playing field

Multifamily construction starts in Indianapolis have contracted sharply through 2024 and 2025, with the Indy MSA on pace for a roughly 65 percent year-over-year decline in new supply for 2025. That local pullback is part of a broader national pattern. Yardi Matrix projects a 60 percent drop in market-rate apartment deliveries in 2026 versus 2024 levels, with U.S. multifamily completions falling from approximately 590,000 units in 2025 to roughly 430,000 in 2026.¹

For existing owners and operators, the math is straightforward. Fewer competing units entering the market means less concession pressure, stronger lease-up velocity, and a clearer path to pushing rents. For acquirers, the thinning pipeline reduces the risk of buying into a deliveries glut, a concern that has weighed on underwriting in other primary markets over the past 18 months.

Rent growth with room to run

Indianapolis’ rent growth has consistently outpaced the national average, even as other markets have reverted to or fallen below long-term norms. Average apartment rents in the metro remain roughly 31 percent below the national average, while overall housing costs sit approximately 23 percent below U.S. levels.²

That gap is everything. It means Indianapolis can absorb meaningful rent increases before affordability becomes a constraint on demand, giving operators pricing power that markets like Austin, Phoenix, and Nashville have largely exhausted in this cycle.

Looking ahead in 2026, Yardi Matrix ranks Indianapolis among the top Midwest and coastal markets for projected rent growth at 1.9 percent, alongside Kansas City and just behind Boston and Washington, D.C.³  Pair that forward-looking rent headroom with a diversified employment base, and the demand floor here is reinforced by breadth, not dependent on a single sector.

A diversified economy that doesn’t depend on one bet

Single-industry metros carry risk hard to price in a downside scenario. Indianapolis doesn’t have that problem. Healthcare, logistics, life sciences, advanced manufacturing, and professional services all anchor the local economy, and capital is flowing to match.

There are more than $8 billion in active economic development projects taking place in the urban core alone, including:

• $4.3B IU Health downtown hospital expansion, one of the largest healthcare capital projects in U.S. history, and on track to open in late 2027
• $781M Indiana Convention Center expansion and Signia Hotel
• $600M redevelopment of Circle Centre Mall
• Eli Lilly reinvesting $1.8B into its manufacturing facilities, alongside continued expansion in Boone County and downtown Indianapolis
• IU and Purdue’s long-term investment in upgrading and expanding their Indianapolis campuses

Elanco also built a new global headquarters in the near-west downtown Indianapolis in a $200M investment. These are long-duration capital commitments that signal employer confidence in the region’s trajectory, and they translate directly into sustained apartment demand from a growing workforce pipeline.

44,000 new residents and the demand engine behind the numbers

The macro story underneath all this is population. Indiana added 44,144 residents in 2024, its largest single-year gain since 2008, bringing the state’s total population to 6.92 million.⁴ The 11-county Indianapolis-Carmel-Greenwood MSA captured roughly 60 percent of that growth, adding over 26,600 residents and pushing the metro past 2.17 million people.⁵

Suburban counties are leading the charge. Boone and Hancock posted growth rates of 3.4 percent and 3.1 percent for the second consecutive year, while Hamilton and Hendricks each came in at 1.9 percent. The metro’s overall 1.24 percent growth rate outpaced Chicago (0.76 percent), Detroit (0.71 percent), Cincinnati (0.88 percent), and Cleveland (0.26 percent).⁶

The labor market tells a similar story. Between August 2024 and August 2025, unemployment in Indianapolis fell from 4.0 percent to 3.3 percent, even as national unemployment rose from 4.2 percent to 4.3 percent. The Indianapolis labor force has expanded 7.8 percent since August 2019, nearly double the 4.3 percent national pace.⁷ Professional, scientific, and technical services employment in the MSA grew 4.8 percent year-over-year through August 2025, with chemical manufacturing employment up 6.0 percent over the same period.⁸

Illinois residents are coming next door

More than 25,700 Illinois residents moved to Indiana last year, compared to roughly 14,100 moving the other direction, a net gain of over 11,600 from a single state.⁹

Real-time moving data tells the same story. The U-Haul Growth Index ranked Indiana as the 8th-leading growth state for 2024, up 19 positions year-over-year and one of the largest jumps nationally.¹⁰ Indianapolis ranked as the 20th-leading U-Haul growth metro.¹¹

People are choosing Indy for cost, jobs, and quality of life, and they have been for years. Further, the state of Indiana has posted more than a decade of consecutive annual population growth.

The bottom line

Indianapolis is a fundamentals play: rent growth with affordability-driven upside, a diversified employment base deepening its commitments, and population growth powered by sustained in-migration from higher-cost markets. In a cycle where discipline matters, these inputs support durable returns over a multi-year hold.

Whether you are evaluating an acquisition, exploring a disposition, or considering a recapitalization of an existing asset in the Indianapolis market, Walker & Dunlop has the insight and execution capabilities to help you move with confidence. Reach out to our Midwest experts to start the conversation.

‍

^{1 Yardi Matrix Multifamily Supply Forecast, Q42025; Yardi Matrix National Multifamily Market Report, January 2026. InternalW&D market intelligence for Indianapolis MSA.}

^{2 CoStar Group Market Trend data, 2025; Cost ofLiving Index published by the Council for Community and Economic Research(C2ER).}

^{3 YardiMatrix, 2026 Multifamily Outlook, January 2026.}

^{4 U.S. Census Bureau, Annual Population Estimates (Vintage 2024); Indiana Business Research Center, IU Kelley School of Business, March 2025.}

^{5 Indiana Business Research Center, IU Kelley School of Business, March 2025. The 11-county Indianapolis-Carmel-Greenwood MSA added 26,661 residents and is home to more than 2.17 million people.}

^{6 Indiana Business Research Center, IU Kelley School of Business, March 2025. Growth rate comparisons derived from U.S. Census Bureau estimates for peer MSAs.}

^{7 Indiana Business Research Center, Indianapolis Forecast 2026, IU Kelley School of Business (December 2025); Federal Reserve Bank of St. Louis / U.S. Bureau of Labor Statistics.}

^{8 Indiana Business Research Center, Indianapolis Forecast 2026; Hoosiers by the Numbers, Current Employment Statistics (CES), August 2025.}

^{9 U.S. Census Bureau, 2024 American Community Survey, State-to-State Migration Flows (released January 2026).}

^{10 U-Haul Growth Index, 2024 Growth States Rankings (January 2, 2025). Indiana rose 19 positions year-over-year, from No. 27 in 2023 to No. 8 in 2024.}

^{11 U-Haul Growth Index, 2024 Growth Metro Rankings (January 2025). Indianapolis-Carmel-Anderson ranked 20th nationally.}