People are moving to Indianapolis. In fact, Marcus & Millichap reports that the net in-migration levels for the Indianapolis metropolitan area rank among the highest in the Midwest. That’s good news for the region’s multifamily sector, with Marcus & Millichap predicting that Indianapolis’ apartment market will continue to see growth throughout the rest of 2026, thanks largely to this population boost.
How quickly are people moving to the Indianapolis region? Marcus & Millichap said that since 2020, outlying counties such as Boone, Hamilton and Hancock have seen population increases of more than 10%.
The demand from new renters in the area has helped push monthly multifamily rents up by as much as 50% during the past five years in these counties, outpacing the 19% increase in apartment rents in Indianapolis’ CBD.
Vacancy rates remain stable, too, in the Indianapolis-area multifamily sector. Marcus & Millichap reported that the vacancy rate in downtown Indianapolis’ apartment buildings remains below its long-term average. That’s partly because of limited new supply added to the CBD since the middle of 2024. Corporate relocations, such as Elanco’s move of more than 700 employees to its new global headquarters, have helped boost vacancy rates in downtown Indianapolis, too.
Marcus & Millichap predicts that the apartment vacancy rate in the CBD will fall to the low-5% range this year for the first time since 2022.
There’s big news for smaller submarkets, too, with Marcus & Millichap predicting that communities such as Lawrence and Greenwood-Johnson County will capture a larger share of apartment completions this year. At the same time, deliveries in Carmel will make up more than half of the Indianapolis area’s new apartment projects in 2026.
But how about the numbers?
Marcus & Millichap predicts that the Indianapolis market will see 2,100 new apartment units delivered in 2026. That’s below he long-term average for this area as inventory growth slows to 1.1%.
Marcus & Millichap is predicting, too, that the Indianapolis-area multifamily vacancy rate will fall for a third straight year to 4.2%. This would be on par with the predicted vacancy rate in the Cleveland and Columbus, Ohio, markets.
The Indianapolis area’s median effective apartment rent should rise to $1,355 a month this year, according to Marcus & Millichap. However, the year-over-year pace of change of 2.1% will be less than half of the prior decade’s average of 5.6%.
