In a word: Woah.
In a gif: (Someone shaking head, confused, woah.)
As we march our way into summer, we’re looking back at a fascinating first half of 2025. I’m often asked, “How’s the market?” to which I respond, “What part of the market would you like to know about?”
The USA is seeing a lower transaction count than we have in the past 30 years. A lot of brokers just aren’t selling much of anything. The average sales price is higher than ever. Sellers are leaving closings with large amounts of equity, positioning them well to make their next move.
Inventory is higher than we’ve seen in quite a while. Buyers have options and can actually go home and sleep on their decision before finalizing their offer terms.
Here are some of the things I’m keeping an eye on:
Interest Rates and Affordability
Mortgage Rates: Nationally, 30-year fixed mortgage rates currently hover around 6.7%, down slightly from recent peaks but still elevated by historical standards.
Affordability Trends: Fascinatingly, households earning $100k only qualify for about 37% of all listings—down from 65% in 2018. Clearly, affordability remains stretched.
Inventory and Supply Dynamics
Rising Inventory—but Not for Entry-Level Buyers: NAR reports show rising national inventory and modest affordability gains. However, supply still falls short in the crucial $200K to $400K range due to builders focusing on larger, higher-end homes.
Greater Lafayette Snapshot: Most of these sales remain within the affordability sweet spot, reflecting our region’s more accessible prices.
Local Economy and Job Market
Strong employer presence continues to bolster demand.
- Purdue University, with over 50,000 students and 12,000 employees, remains a major economic engine.
- Major employers like Subaru of Indiana Automotive, Wabash National, Caterpillar, and Evonik also contribute to local job stability.
This diverse economic base supports steady housing demand—even in a tight national climate.
What it Means for Buyers
- Lock in rates now—each half-point move can expand your price range by 5 to 10% Perhaps you’ll find a seller who will help you by buying down your rate a point or two.
- Expect limited inventory, especially in the $200K to $350K range. Move quickly. You’re competing with investors in this price range, too.
- Increased negotiating power: rising inventory nationally has led to more price cuts and longer days on market
What it Means for Sellers
- Hold strong: local median prices remain stable, with continued multiple-offer scenarios on well-priced, well-prepared homes.
- Trends toward price reductions suggest staging and professional pricing are more crucial than ever.
- Rate-lock conditions mean many homeowners are hesitant to sell, reducing turnover—your listing could stand out.
Market Outlook
- If rates decline to ~6.4% or lower, affordability will improve meaningfully—NAR forecasts stronger home sales later in 2025.
- Even if national markets cool, Lafayette’s combination of attainable prices and a robust economy should preserve local appeal.
- Watch for new builds—if local builders tap into the underserved starter-home segment, supply plus demand could finally meet.
Final Take
Greater Lafayette is not immune to national cost pressures. Smart buyers act quickly and lock in rates; attentive sellers price and present thoughtfully. And if mortgage rates ease later this year, both affordability and market activity should revitalize.
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