The Cost to Buy vs Rent in Indiana

One of the most affordable states in the U.S. is Indiana. The typical home in most major cities is well under $250,000, a massive discount from the national average of $417,700.

These home prices mean monthly payments are just slightly more expensive than renting in many cities. Our homebuying assumptions include a 5% down payment, estimated private mortgage insurance (PMI), property taxes, and homeowner’s insurance. See the full methodology at the end of this article.

If you’re an Indiana resident or have considered moving here, you might be able to finally afford to own a home.

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Monthly Cost Difference to Buy

1. Indianapolis +$232
2. Fort Wayne +$533
3. Evansville +$517
4. South Bend +$70
5. Bloomington +$297
6. Lafayette +$97
7. Elkhart +$205
8. Carmel +$1,364
9. Terre Haute +$142
10. Muncie +$19

1. Indianapolis

Indianapolis is not only Indiana’s largest city but also one of its best values. With home prices in the low 200s, buying a home with 5% down will cost only about $200 per month more than renting.

2. Fort Wayne

Allen County Courthouse in Fort Wayne, Indiana.

Fort Wayne home prices didn’t top out in 2022 like in many markets. After a brief reprieve, they kept climbing and have posted nearly an 8% gain in the past year, says Zillow.

3. Evansville

Evansville is extremely affordable, especially considering the robust job market in the area. Toyota employs 7,500 people, Deaconess Health System has 10,500 employees, and dozens of area companies employ thousands more.

4. South Bend

The University of Notre Dame near South Bend, Indiana.

Near the famous Notre Dame University and Fighting Irish football team, South Bend requires relatively high rent compared to home prices. In fact, parents of Notre Dame students might consider buying a house for their kids to live in while attending school. Room and board at the university runs over $17,000 per year, while we estimate a house including PMI, taxes, and insurance would be just $16,900 annually.

5. Bloomington

One of the more spendy places on our list, Bloomington homes are around $300,000. But you won’t save much by renting, which costs nearly $2,100 per month.

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6. Lafayette

Lafayette, Indiana courthouse.

Not to be outdone by South Bend, Lafayette is home to Purdue, another standout university. Like South Bend, rents are high compared to the cost of owning. Estimations say buying a house is only about $100 more per month than renting.

7. Elkhart

“The city with a heart,” according to its website, Elkhart is a destination for arts, business, and recreation.

8. Carmel

Carmel is the most expensive city on our list, and the second richest in Indiana, according to Property Club, with a median household income of $120,000.

9. Terre Haute

About an hour southwest of Indianapolis, Terre Haute is a town of around 60,000. Homes are affordable here, weighing in at under $150,000. Someone who is thinking about renting here should try to find a 5% down payment through savings, a financial gift, or down payment assistance. If they do, they’ll only pay about $142 more per month to own a house than rent one.

10. Muncie

The third town on our list to host a major university, Muncie is home to Ball State, with around 14,000 students. Not only are home prices the lowest of any city featured here, it only costs $19 more per month to own than to rent.

Get Pre-Approved for Your Indiana Home

Homes in Indiana range from pricey to ultra-affordable. There’s something for just about any budget. See what home price you qualify for by requesting your pre-approval from an Indiana lender.

See what you can afford in Indiana.

Methodology

To compare the costs of buying versus renting in 10 Indiana cities, we started with typical home prices as reported on the Zillow Home Value Index (ZHVI) Single-Family Home Time Series for November 2023. We assumed a 5% down payment, the typical requirement for first-time buyers. We then calculated the monthly payment on a 30-year fixed mortgage using a 6.845% rate, the average rate at the time of data collection as published on Optimal Blue Mortgage Market Indices for a buyer with less than 20% down and a 700 FICO score. We added PMI costs per rates from mortgage insurance provider MGIC. Then we added annual homeowner’s insurance premiums as reported by Policygenius and property tax data from Roofstock and the U.S. Census Bureau. We assumed zero HOA dues. We compared this total housing payment with rent data from the Zillow Observed Rent Index (ZORI) Smoothed Single Family Residence Time Series except when no data was available, in which case we searched for current rent statistics on Zillow’s site. City selection was based on the highest population except where it made sense to bypass a suburb of a major city to highlight one in a different area.