Just weeks after Indianapolis was named America’s best city to buy a home, the state it sits in has been hit with an alarming distinction.
Indiana now has the highest foreclosure rate in the entire country. In February alone, the state recorded one foreclosure filing for every 1,597 housing units – more than double the national rate of one for every 3,701 homes.
The numbers reveal a stark contradiction: the same state touted as a prime opportunity for homebuyers is also seeing thousands of homeowners struggle to keep their properties.
The ranking of America’s top housing markets came from Zillow, which weighed factors including home price trends, affordability, and projected market growth. Markets ranked highest are seeing prices steady for now – but with gains expected in coming months.
Indiana topped the list, with typical homes around $283,040 and values set to rise about 2.9 percent this year. The market offers buyers a rare combination of affordability and future price gains.
In Indianapolis, the numbers appeared especially favorable. A typical buyer would need to spend only about 27 percent of their income on mortgage payments.
Indianapolis is widely seen as one of the Midwest’s most livable cities.
It is best known for hosting the legendary Indianapolis 500 — one of the world’s most famous auto races — and boasts a strong sports culture with teams including the Colts and Pacers.
Zillow has declared the 10 best markets to buy a home in this year and Indianapolis, Indiana, topped the list
The city stands out for its historic monuments, growing arts scene, and central location that’s earned it the nickname ‘Crossroads of America’
The city’s walkable downtown, expanding arts scene and central location — earning it the nickname the ‘Crossroads of America’ — have helped make it increasingly attractive to homebuyers.
But the foreclosure data suggests many existing homeowners are already struggling to keep up with rising housing costs.
Indianapolis – the state’s largest city – has been particularly hard hit. The metro recorded one foreclosure filing for every 1,249 homes in February, giving it the third-highest foreclosure rate in the nation.
Only Lakeland and Punta Gorda in Florida reported worse figures for metros. Both of which have faced persistently high foreclosure levels.
A foreclosure occurs when a homeowner can no longer keep up with mortgage payments, prompting the lender – usually a bank – to begin a legal process to recover the unpaid loan, often by repossessing and selling the home.
Experts say a combination of rising property taxes, higher insurance premiums and the cost of maintaining aging homes is putting pressure on many Indiana homeowners.
Those financial strains are being worsened by slow wage growth in parts of the state.
The surge in distressed properties can have wider consequences for communities. When banks repossess homes and sell them at discounted prices, it can drag down surrounding property values and erode the equity of nearby homeowners who have kept up with their payments.
The city of Indianapolis had one of the highest foreclosure rates in the country in February, and its home state of Indiana saw the highest rate overall
As banks seize more homes and flood the market with discounted properties, surrounding home values drop, eroding equity for nearby homeowners who have kept up with their payments
Indiana’s housing stress comes amid a broader rise in foreclosures across the United States.
In February, foreclosure activity across the country reached 38,840 properties – a 20 percent increase compared with the same month last year.
Filings track the full spectrum of the process, from initial lender warnings to the formal repossession of homes after missed mortgage payments.
Although the February total was slightly lower than January, it marked the twelfth straight month of year-over-year increases, showing how Americans are increasingly struggling to pay their bills.
‘Foreclosure activity in February marked the twelfth consecutive month of annual increases, extending a gradual upward trend that began early last year,’ said Rob Barber, chief executive of ATTOM.
Foreclosure starts – when lenders officially begin reclaiming a property – have climbed 14 percent from last year, while completed repossessions have jumped 35 percent.
