Indiana’s wealthiest households – those earning $500,000 or more per year – represent a small but influential segment of the housing market. Nationally, this income level roughly corresponds to the top 1% of earners. From 2018 through 2023, these high-income Hoosier households drove a vibrant luxury real estate market amid broader housing trends.
This period saw soaring home prices, intense competition for properties, and evolving buyer behaviors accelerated by the COVID-19 pandemic. Despite being a niche group, wealthy buyers had an outsized impact on Indiana’s real estate market during these years. They leveraged their financial power (often buying with cash or large down payments) to compete in a low-inventory market, expanded into new property types like second homes, and generally kept the luxury segment resilient even as interest rates rose.
Market Overview and Regional Context
Indiana’s High-Income Households
Only a very small fraction of Indiana households earn $500,000+ annually, but those that do wield considerable buying power. These affluent households can afford properties far above the state’s median home values. Indiana’s median owner-occupied home value is about $226,000, roughly two-thirds of the U.S. median of $340,000.
In practical terms, a $500k-earning family in Indiana can comfortably purchase homes that would be considered “luxury” by local standards – often in the $1 million-plus range – whereas in coastal markets the same income might buy only a modest house. This high relative purchasing power means Indiana’s top earners often inhabit some of the most exclusive properties in the state.
Regional Concentration
High-income homebuyers in Indiana are primarily concentrated in a few prosperous areas. The Indianapolis metro (especially its northern suburbs like Carmel and Fishers in Hamilton County) hosts a large share of the state’s wealthy households, as reflected by that county’s top-ranked income levels in the state.
These areas feature upscale neighborhoods with expansive single-family homes, which are the preferred choice for many affluent families. Smaller clusters of high earners are also found around the Chicago suburbs in Northwest Indiana (Lake and Porter counties) and in other pockets tied to industry hubs (for example, executives in the Fort Wayne and Evansville regions, or university and corporate leaders around Bloomington and Columbus).
While the majority of $500k+ earners reside in Central Indiana, their homebuying trends collectively shape the statewide luxury market.
Market Conditions (2018–2023)
The period from 2018 to 2023 was marked by dramatic swings in the housing market, both nationally and in Indiana. Going into 2018 and 2019, the market was relatively stable with steady price appreciation and favorable interest rates. However, the onset of the pandemic in 2020 unleashed a surge in housing demand, especially for larger homes, amid record-low mortgage rates.
Indiana’s housing market “was swept into uncharted waters in 2021” with a combination of scarce inventory, strong buyer demand, and rock-bottom interest rates. Statewide, house prices jumped 17.5% year-over-year in Q2 2021 – an unprecedented spike for Indiana. By that summer, inventory was so tight that the months’ supply of homes for sale fell below one month (far from the roughly six months considered a balanced market), and bidding wars became the norm, with many homes selling above their list price. This frenzied environment particularly affected high-end buyers: even luxury listings saw multiple offers, and cash bids often won out.
Impact on High-End Buyers
In this seller’s market, Indiana’s affluent buyers had a clear advantage. Their resources allowed them to navigate soaring prices and intense competition more easily than average buyers. National data confirms that in these competitive conditions, “more well-off home buyers were able to have their bids accepted by offering larger down payments and even by paying cash.”
In other words, wealthy buyers could pull ahead of the pack – an observation supported by Indiana Realtors who saw luxury homes continue to move quickly despite the market chaos. By leveraging cash or sizable equity, high-income households often beat out contingent or financed offers, securing premier properties even as overall supply dwindled.
Regional Variations Within Indiana
While overall trends were upward across Indiana, there were noteworthy regional differences in homebuying among $500k+ earners.
Indianapolis Metro
The Indy metro anchored the state’s luxury market from 2018–2023. Hamilton County, which includes Carmel and Fishers, consistently ranked as the richest county in Indiana (average household income ~$156k), indicating a heavy concentration of affluent buyers.
These buyers predominantly chose expansive single-family homes, often new or recently built, with amenities like gourmet kitchens, home offices, and ample outdoor space – features that grew in importance during the work-from-home era. Indianapolis itself also saw some high-income households opt for downtown luxury condominiums or townhouses for a cosmopolitan lifestyle.
Northern Indiana and Lake Michigan Area
In the northwestern corner near Chicago’s influence, affluent buyers from Indiana (and some migrating from Illinois) purchased high-end homes in communities like Dyer, Munster, and around the Lake Michigan shoreline.
Relative to Indianapolis, the volume was smaller, but homes in these areas offered proximity to Chicago’s jobs or waterfront vistas that appealed to wealthy buyers. Notably, a subset of Indiana’s high earners have chosen to live in Indiana while working in Illinois to benefit from Indiana’s lower taxes and cost of living, fueling purchases of upscale homes in commuter-friendly Indiana towns.
Other Regions
Other pockets of wealth-driven housing activity included college/university towns (e.g., Bloomington, home to Indiana University – where some faculty, administrators, or entrepreneurs are in top income brackets – and where luxury condos or historic homes near campus attracted high-end buyers).
In Fort Wayne and Evansville, which are major metros in their own right, a handful of prosperous corporate leaders and professionals traded up to the finest homes in the area. And in resort-like locales such as the lakes of Northeast Indiana or Brown County’s wooded retreats, some wealthy households acquired vacation residences.
Luxury Market in Context
Overall, the state’s luxury market growth was broad-based – every region saw more high-end activity by 2021 – but naturally concentrated where high-income households live and play. Indiana remains an affordable market in national terms: in 2020, only about 5% of Indiana homes sold for over $750k, and around 1% (or less) topped $1 million, whereas in a state like California more than 20% of homes exceed $1M.
This underscores that Indiana’s wealthy buyers face less local competition at the very top end; a $1 million+ home in Indiana is a relative rarity and typically one of the most luxurious properties available in its area. Consequently, when such properties hit the market, they garner attention from the state’s small pool of elite buyers, often leading to quick sales if priced right.
Property Types and Preferences
Single-Family Dominance
Perhaps the most defining characteristic of high-income homebuying in Indiana is the overwhelming preference for single-family homes. Indiana has always been a state of homeowners and standalone houses – “most housing in Indiana consists of single-family homes” – and this holds true even at the luxury level.
Whether it’s a gated estate in the suburbs or a custom-built mansion on a multi-acre lot, detached houses have been the go-to choice for affluent buyers. The state’s low density and wide availability of land make it feasible for wealthy families to own large homes with extensive yards, something that might be unattainable in more crowded states.
About 73% of Indiana’s occupied housing units were single-family detached houses, compared to ~61% nationally. This single-family oriented landscape persisted into the 2010s and 2020s, reinforcing the norm of buying a house rather than an attached unit.
Upsizing Trends
During 2018–2023, many high-income households were in a life stage or financial position to “move up” to larger primary residences. The later 2010s saw Millennials (America’s largest generation) hitting their peak homebuying years – and in the case of high earners among them, that meant transitioning from starter homes or condos into spacious forever homes.
Additionally, the pandemic created a sudden emphasis on space: remote work and remote schooling led affluent buyers to seek out properties with extra rooms for home offices, gyms, and classrooms. Nationwide, the COVID-era dynamic of wage growth for professionals and telework opportunities “raised demand for larger homes,” and Indiana’s market was a clear example.
Realtors reported wealthy buyers looking for homes with 4, 5, or more bedrooms, expansive great rooms, and large yards as families sought comfort and privacy during lockdowns. Upsizing was prevalent: current homeowners looking to upgrade to larger or nicer homes had to pay more to do so in this competitive climate, but many did – especially as their stock portfolios and savings saw gains in 2020–2021 that could be channeled into real estate.
Downsizing and Alternative Living
On the flip side, not all wealthy buyers were expanding their footprint; some were downsizing or shifting lifestyle. A portion of Indiana’s high earners are empty-nesters or retirees in their 60s and above. In 2018–2023, a number of them opted to sell their longtime large family homes and move into easier-to-manage properties.
This created a niche demand for high-end condos, townhomes, and “lock-and-leave” residences. For example, downtown Indianapolis saw increased interest in luxury condominiums from affluent downsizers who wanted urban amenities and less maintenance.
Developers responded by proposing projects like a 69-unit luxury condo building in Broad Ripple (Indianapolis) and million-dollar condos in suburban Fishers, aiming to cater to this market. While such projects are relatively few, they indicate a growing acceptance of condo living among the wealthy.
Upscale townhouses in central neighborhoods (and even high-rise “luxury apartments” in the sense of for-purchase lofts or penthouses) found buyers who were willing to trade square footage for convenience, security, and location. Still, it’s important to note that these attached housing options remained a minority of purchases – perhaps under 10% of high-income homebuying – as most affluent Hoosiers continued to favor single-family homes as their primary residence.
Specialty Properties
Some wealthy individuals acquired unique property types like farmland estates or hobby farms, seeking privacy or recreational land (particularly during the pandemic when having private outdoor space gained allure). Others invested in multi-unit residential buildings not just as an investment but also to occupy one unit while renting out others (though this was less common).
Overall, from 2018–2023, the pattern is clear: for their own homes, high earners stuck largely with traditional houses, whether mansions in exclusive subdivisions or custom builds on the outskirts of town. Condos and townhomes played a supporting role mainly for older buyers or those with a second home elsewhere.
Vacation Homes and Investment Properties
Beyond their primary residences, Indiana’s affluent households have been active in acquiring second homes and investment real estate. The 2018–2023 window, especially the pandemic years, witnessed a boom in vacation-home buying nationwide that did not skip over Indiana’s wealthy.
Surge in Vacation-Home Demand
With the freedom of remote work and pandemic-related travel restrictions, many high earners sought out vacation homes as getaways and safe havens. Nationally, demand for second homes skyrocketed – by early 2021, mortgage applications for vacation properties were up 80–90% above pre-pandemic levels.
Redfin reported that interest in second homes hit a record 92% higher than pre-pandemic by January 2021. Indiana’s $500k+ earners contributed to this trend. Some purchased lake cottages in Indiana’s lake districts or in nearby Michigan (e.g., along Lake Michigan or inland lakes) to enjoy long weekends away from the city.
Others looked south to warmer climates; it became common for wealthy Midwesterners to buy winter homes in Florida or Arizona during this period, given low interest rates and strong stock market gains. The data shows that vacation home demand remained roughly 77% above pre-pandemic levels even in late 2021, indicating sustained interest.
“The wealthy are still flush with cash and have access to cheap debt, which is why second-home purchases remain far above pre-pandemic levels,” noted Redfin’s chief economist in early 2022. Indeed, many affluent Hoosiers, flush with liquidity from rising asset values, took advantage of low mortgage rates to snag vacation properties in 2020–2021.
Popular Second-Home Locations
For Indiana residents, popular vacation-home targets included lake and resort areas within driving distance. Northern Indiana’s Lake Wawasee, Lake Michigan’s Indiana Dunes area, and Michigan’s Harbor Country and Grand Haven saw increased buying from Indianapolis and Chicago-area high earners.
Brown County (with its hills and artist colonies) and the lakes around Angola, IN also attracted second-home buyers. Some high-income households opted for out-of-state retreats – e.g., condos on Florida’s gulf coast or ski homes in Colorado – but those purchases, while relevant, fall outside Indiana’s geographic scope.
Within the state, the key point is that affluent buyers significantly increased their ownership of vacation homes during this era, treating them both as personal leisure assets and as investments (many could double as rental properties on Airbnb or VRBO when not in use).
Market Cooling (2022-2023)
The vacation-home boom did eventually cool. By early 2022, as mortgage rates rose sharply and the federal government imposed new fees on second-home loans, the frenzy began to subside. Redfin reported that by March 2022, second-home mortgage rate locks had fallen to their lowest level since May 2020, marking the end of the pandemic-driven boom.
Demand for vacation homes was still about 13% above pre-pandemic at that point (so it didn’t crash to zero) but was clearly trending down from the peak. High-income buyers became more cautious as borrowing costs jumped and financial markets turned volatile in 2022.
Some who hadn’t already bought a second home put those plans on hold, while others turned to the idea of “staycations” or maximizing enjoyment of their primary residence. By 2023, vacation home purchases by Indiana’s wealthy slowed considerably compared to 2020–21 – a pattern mirrored nationally, where vacation-home mortgage applications fell off their highs.
Still, the net effect of 2020–2021 is lasting: far more high-earning Hoosiers now own a second home than before the pandemic, even if new purchases in 2023 were fewer. Many have retained those homes as remote-work flexibility continues (albeit reduced) and as a hedge against future travel restrictions or simply as part of their lifestyle portfolio.
Investment Properties
High-income households also commonly invest in real estate beyond homes for personal use. From 2018 to 2023, with low interest rates and rising rents, there was a compelling case for property investment.
Some wealthy individuals purchased single-family homes or small multiplexes as rental properties, aiming to generate passive income and diversify their assets. Indiana’s relatively low housing prices made investment entry easier – even a $300,000 rental home in Indianapolis would be well within budget for a $500k earner.
Indeed, the hot housing market saw plenty of investors snapping up homes, sometimes outbidding owner-occupants. In central Indiana, roughly one in four single-family rentals was owned by out-of-state investors as of 2022, reflecting a broader investor surge (including large companies).
While many of those were institutional buyers, local high-net-worth individuals also participated in buying rental portfolios. These affluent mom-and-pop investors often paid cash for properties to convert to rentals. During 2020–21, with interest rates around 3%, even those who financed could easily cover mortgages with rent, making it attractive for high earners to park money in rental houses.
Another avenue was fix-and-flip projects: A number of high-income professionals tried their hand at flipping homes during the boom, leveraging their capital to renovate and resell homes for profit in a rapidly appreciating market.
Financing Patterns: Cash is King
One of the clearest differentiators in the homebuying behavior of $500k+ households is how they finance their purchases. High incomes, often coupled with substantial savings or proceeds from previous home sales, give these buyers more flexibility in financing than the typical homebuyer. From 2018 to 2023, there was a pronounced shift toward cash purchases in the luxury segment, especially as market conditions changed.
Evolution of Financing Approaches
In the earlier part of this period (2018–2019), many wealthy buyers still chose to finance homes with mortgages, taking advantage of reasonably low interest rates (around 4% in 2018 falling to ~3.5% by late 2019). Even if they could pay cash, some opted for cheap leverage – investing their money elsewhere while carrying a mortgage at a relatively low cost.
However, they typically made large down payments and had access to jumbo loans with favorable terms. By 2020–2021, with 30-year mortgage rates dropping under 3%, it might seem that every buyer would want a loan. Yet, interestingly, the share of cash buyers began to rise during the pandemic housing frenzy.
Why? In a hyper-competitive market with bidding wars, cash offers gave buyers a decisive edge. High-net-worth buyers were often willing to buy outright or at least remove financing contingencies to win deals. Nationally, the share of home purchases made in cash climbed from 17% to 27% in 2022 – a jump influenced largely by the upper end of the market. In Indiana, Realtors noted the same phenomenon: cash was king in winning bids, and who better to marshal cash than the wealthiest buyers?
By 2022–2023, as mortgage rates soared, cash became not just a competitive tactic but also a financial strategy. With rates hitting 6-7%, taking a mortgage meant incurring high interest costs that even wealthy buyers found unappealing. Many decided to deploy cash reserves instead of borrowing at these rates.
The result: by late 2023, an astonishing 46.5% of luxury home purchases nationwide were being made in cash (a record high), up from about 40% a year earlier. Nearly half of all high-end buyers were now transacting in cash, making mortgage rates almost irrelevant for that segment. This trend was certainly reflected in Indiana’s luxury transactions.
Top-tier buyers, from Indianapolis to South Bend, frequently showed up with cash in hand for high-value listings. Real estate agents for upscale properties began to assume that offers would either be cash or accompanied by a very large down payment (50% or more).
Cash vs. Financing Strategies
Cash purchases became a preferred mode especially from 2021 onward. Wealthy buyers liquidated stock portfolios or used accumulated savings to avoid the hassle of loans. In 2020–21, cash offers helped bypass any delays or uncertainty in loan approval in a fast-moving market (sellers loved the certainty of cash). In 2022–23, cash helped avoid steep interest costs.
Those who did finance often took jumbo mortgages, which remained readily available throughout this period. In 2018–2019, typical jumbo rates were slightly higher than conforming, but by 2020 they dropped too. Some high-income buyers locked in ultra-low fixed rates in 2020–2021, securing loans under 3%.
This turned out to be a boon – as rates rose, those who had fixed low rates were disinclined to ever sell (creating a “lock-in effect” in housing). Meanwhile, a number of affluent homeowners refinanced their existing mortgages in 2020–21 to rates in the 2s or low 3s, reducing their carrying costs and freeing up cash for other uses (like buying a second home or investment property).
NAR’s data show that by 2023, 80% of buyers financed their home purchase, down from 87% in 2021, indicating more buyers (especially repeat and high-end buyers) going the cash route or using proceeds from prior home sales. When high-income buyers did finance, they tended to make large down payments – NAR notes typical repeat buyer down payments around 19% in 2023 (the highest since 2005), but many wealthy buyers put down far more, often 30% or even 50% to avoid jumbo mortgage insurance or to make their offer stronger.
Conclusion: Looking Ahead
From 2018 through 2023, Indiana’s highest-earning households significantly shaped the state’s housing narrative. They rode a wave of robust price appreciation, navigated a brutally competitive market by leaning on their financial strengths, and broadened their real estate footprints with second homes and investments.
In a state known for affordable housing, these buyers operated almost in their own micro-market: one where million-dollar listings traded swiftly, often for cash, and where “home” could mean a downtown luxury condo just as easily as a lakeside lodge or a suburban estate.
Looking ahead, Indiana’s $500k+ earners are likely to remain a pillar of the housing market. Their propensity to buy and invest in real estate provides support even in slower markets. If interest rates stabilize, we may see a resurgence of activity as some who held off in 2023 jump back in.
The desire for quality homes – whether for living, vacationing, or renting out – is a lasting one for affluent households. And in Indiana, they will continue to find that their dollars go a long way. The 2018–2023 rollercoaster reaffirmed that real estate is both a financial asset and a personal haven for the wealthy: through all the economic twists, a beautiful home (or two) in Indiana remained an attainable dream, and one that delivered both comfort and strong returns.
References
- NAR Finds Typical Home Buyer’s Annual Household Income Climbed to Record High of $107,000 in Wake of Rising Home Prices and Mortgage Rates. National Association of REALTORS® (News Release), Nov. 2023
- Indiana’s positive housing market outlook for 2022. Indiana Business Research Center – Kelley School of Business, Nov. 2021
- Indiana housing market outlook for 2024. Indiana Business Research Center – Kelley School of Business, Nov. 2023
- Cities With the Highest Percentage of Luxury Home Sales. Inspection Support Network, Feb. 2022
- Luxury Home Prices Hit All-Time High As Record Share of High-End Buyers Pay Cash. Redfin News, Feb. 2024
- Demand For Vacation Homes Up 77% From Pre-Pandemic in December. Redfin News, Jan. 2022
- Redfin Reports the Pandemic-Driven Second-Home Boom Is Coming to an End. Redfin via BusinessWire, Apr. 2022
- Housing Hoosiers. Indiana Business Research Center – Indiana Business Review, Fall 2002
- Update: What Characterizes the Top One Percent of Income Earners? Gallup poll summary via EricTyson.com, Dec. 2013
- Indiana – Profile data – Census Reporter. U.S. Census Bureau data
- Richest Counties in Indiana | 2025. Indiana Demographics
- Developer plans to build luxury apartments on top of Broad Ripple parking garage. WRTV
- Proposed Fishers development features million-dollar condos, town houses, commercial space. Indianapolis Business Journal
- Out-of-state investors target 1 in 4 single-family rental homes in Central Indiana. WFYI
