Indiana has the highest foreclosure rate in the country

INDIANAPOLIS — From the gas pump to grocery prices, Hoosiers are hurting.

Real estate broker Joel Clausen says, “As great as the Midwest is we are being affected more than most folks are because of the rising cost, because of our lower incomes, our affordability. People are stretched thin right now.”

So thin that Indiana ranks the highest with foreclosure rates in the country, according to ATTOM, which Clausen sees more often than you think.

Clausen explains, “It’s really tough because people overpaid during COVID and now the assessments are catching up to them, and the mortgage payments are going up, and people just can’t afford it.”

ATTOM found one foreclosure for every 1,579 housing units in the state, a 60% increase from just a few months ago in November.

“There’s a lot of things that are happening right now to kind of cause some of these inflated numbers and stress on folks that we generally don’t see,” he said. “So, it’s just kind of a perfect storm of a lot of things happening right now that Indiana kind of getting kicked in the teeth a little bit.”

Clausen adds that the prices of homes in Indiana are also weather dependent because of different seasonal extremes, so the cost of utilities also contributes to the problem.

“We have higher gas prices, people still have to drive. We have higher groceries at the grocery store right now that people have to have to eat. And so, it’s just a lot of the perfect storm right now and with the war going on as well,” he says.

Clausen helps homeowners across central Indiana when it comes to foreclosure.

“They don’t ask for help when they first kind of get a notice or they first get behind, they think, you know, hey, I can just pick up a few more hours of work, I can do DoorDash, I can do whatever to make some money, and it just, it compiles on top of things and generally when I talk to folks, it’s almost too late,” he says.

He says a lot of people who get stuck in that spot may be living well above their means.

Clausen suggests budgeting and asking for help early on.

IU Center for Real Estate Studies Associate Director Sara Coers saw the writing on the wall.

“The foreclosure rate is the first indication of really deep trouble,” she says.

“We’re headed for a time where affordability is going to continue to erode, and basically it’s just going to become a harder and harder situation for people in Indiana to afford their housing,” Coers said. “We tend to lag the rest of the country in trends when it comes to housing, but we’re the first to show the negative impacts, so our prices haven’t slowed down the way the rest of the country has, but we don’t have the economic conditions to keep us ahead of the curve. I don’t know that we’re going to become California anytime soon, but I do think that we’re headed in the wrong direction compared to the country.”

On top of rising costs, Coers believes the state’s low wages don’t help.

“People who are using 1995 wages to try and buy 2025,” Coers explains.

“We’re kind of like a rubber band stretched to its limit all the time on affordability, and the minute it starts to get a little too stretched, we’re the first to snap because we’re a very low wage dependent economy,” she says.

Coers suggests a few solutions such as more affordable housing, incentives and higher paying jobs because Hoosiers don’t want to feel that rubber band snap and see a foreclosure sign in their front yard.

“This is definitely not a list that we want to be at the top of, because when employers see this list, they think, oh, do we want to bring jobs to this state?” Coers says.