New home construction continues to rise in county despite economic climate - Seymour Tribune

New home construction continues to rise in county despite economic climate - Seymour Tribune

Home construction was on the rise in 2023 as the annual county permitting report showed 45 new homes constructed in that year, more than ever before.

Erika Malone | The Tribune

Barnette

The estimated total investment in the county in 2023 was around $20 million for new home construction, an increase of $3.2 million from 2022.

Erika Malone | The Tribune

According to Jackson County’s annual permitting report, there were more single-family homes constructed in the jurisdiction in 2023 than ever before.

“With the current economic climate, I would have never guessed this would be the case, but investment in Jackson County remains strong despite the rising interest and inflation rates,” said Conner Barnette, the county’s building commissioner.

Forty-five new homes were permitted in 2023, and Barnette estimated the total annual investment in the county was in the ballpark of $20 million, an increase of approximately $3.2 million from 2022.

Of permitted homes, the approximate median square footage of conditioned space was just over 2,000 square feet, and the median cost was just north of $300,000.

For the city of Seymour, a total of 42 new homes were constructed in 2023, compared to 28 in 2022.

Barnette said inflation has hit the housing market, especially new housing construction, just as hard as it hit every other aspect of the economy.

He said the cost of lumber has dropped relatively close to pre-COVID-19 pandemic prices; however, other construction materials, such as land and services, have not.

“Cost of construction is driven by demand and inflation,” he said. “Personally, I don’t see either slowing down in the near future.”

Barnette said rising interest rates typically affect the market, and construction slows. He said even though interest rates ranging from 6% to 8% seem high in comparison to the last 10 years, historically, they are fairly normal.

“I believe with the uncertainty surrounding the market, people are moving forward with the thought that if rates continue to increase, great, they’re locked in,” he said. “If they decrease, refinancing is always an option.”

Even with rising interest rates and inflation, Jackson County still seems to be holding strong in the current economic climate. The question of affordability, however, can be a concern for some Hoosiers as demand, inflation and interest rates continue to rise.

While affordability is an overall concern for many, in recent years, young adults have flooded the housing markets, according to a report from Indiana Business Review.

Between 2019 and 2022, Indiana saw an increase of more than 93,000 households headed by an individual under the age of 45, according to the Census Bureau’s American Community Survey. This influx has propelled the state to its fastest rate of new household formation in decades.

Prior to the rise in mortgage rates, many of these young adults became homeowners, while the number of renters in this age group declined.

This led to a wide jump in homeownership rates among Indiana’s young adults after two decades of steep decline. As homeowner costs escalated in 2022, however, new renters in this age group outnumber new homeowners once again, according to Indiana Business Review.

“Inflation has always had an impact on entry-level homebuyers,” said Tom Goecker with Goecker Construction in Seymour. “Right now, it is cheaper to own than to rent if the potential buyers have the dollars saved up for a down payment.”

Barnette said he thinks the county will continue to see growth as the market allows and the demand, but he worries supply may not be able to keep up.

“Jackson County’s a great place to live, work and raise a family,” he said. “While inflation and the cost of living have increased in Jackson County, it has had much greater impact in other parts of the state and country.”

Goecker said while Jackson County has a high demand for housing and more subdivisions are being built in the future, there is still a shortage of homes for entry-level homebuyers.

Barnette said the county’s proximity to larger municipalities while still maintaining its small-town charm is becoming increasingly attractive along with a strong job market, lower tax rates than most other areas and a strong sense of community.

“This, among other factors, makes Jackson County an attractive place to call home,” he said. “I think you’ll continue to see increased growth as long as the market allows. There is not an abundance of housing or land available in Jackson County right now, and although I believe the demand will continue to be there, the supply may not.”