by Katie Mientka

$36,000. What could you do with this amount of money? Purchase a nice new vehicle. Fund a year of college for your child. Give your retirement account a healthy infusion. Or… buy the exact same new-build house today for tens of thousands of dollars more than it cost last year.

The average cost for a new home increased by nearly $36,000 compared to a year ago— who would have thought we’d look back on 2020 with any kind of longing! The fact is, though, that 76% of the Indiana population was already priced out of the housing market. The average new house cost $316,000, making it a dream that was too far out of reach for millions of Hoosiers. An additional $36,000 only adds insult to injury. What is behind this dramatic, and discouraging, increase in cost?


2021 served up a perfect storm in terms of housing prices: during quarantine, many homeowners turned to improvement projects to fill their time; mortgage interest rates dropped significantly to encourage movement in the market, and homebuilders amped up production in the tail end of 2020.

According to the National Association of Home Builders, lumber costs pushed the price of a new home up by $16,000 by February 2021. When the Association assessed pricing again in August, it had risen to $24,000. Now, here we are at $36,000. Why the astronomical product pricing increase?

Supply and demand. A simple answer to a complex problem, but we’ll start there. Lawrence Yun, chief economist of the National Association of Realtors says, “There was a great fear among sawmills to prepare for a downturn. When home buying surged, they could not open up capacity quickly enough.” Mills could not produce enough lumber to accommodate new home build demands and, of course, the surge of people building quarantine decks, she-sheds, playhouses, additions, etc.


It is not just individuals and families that suffer when homes are priced out of reach; communities fail to thrive economically and socially. Achievable housing delivers a number of critical benefits, including:

  • Serving the underserved and making homes achievable for teachers, police officers, nurses, tradespeople… people just like us.
  • The ability to build on smaller lots, boost density, and provide a variety of home types (e.g. townhomes, multifamily housing) to meet the evolving needs of community members.
  • Creating a second line of business for home builders (value-based housing has a lower margin but faster turn around thanks to the streamlined, efficient processes).
  • Enhancing the diversity of neighborhoods and improving quality of life.


Action on a national level is imperative – but there is plenty to do closer to home. Build Indiana Roots educates Hoosiers on achievable housing and advocates for responsible and equitable housing policies. From the Oval Office and the Indiana General Assembly to city councils and town select boards, we work to provide information and insight to leaders and policymakers. Visit to learn more.