Indiana's pharmaceutical surge offsets manufacturing headwinds
Economic drivers
Nondurable goods manufacturing, especially pharmaceuticals, is a primary economic driver for Indiana. Eli Lilly's multi-billion dollar facility in the LEAP innovation district in Lebanon exemplifies this growth. The state's exports in pharmaceuticals topped $22 billion in 2024.
Housing market right now
Indiana's housing market in early 2026 shows a median home sale price up 4.0% year-over-year, with 6,520 homes sold in March 2026. Inventory improved slightly in 2025, but prices continue to rise faster than the national average, impacting affordability. Multi-family housing construction is increasing, particularly in the Indianapolis metro area.
Migration patterns
Indiana's population grew by 38,579 residents in 2025, largely due to migration, which accounted for 81% of the state's gains over the past three years. Net domestic migration more than doubled in 2025, while international migration, though still the largest source of growth, decreased by 53% from 2024. Boone and Hancock counties in the Indianapolis metro area, along with Clark County, were among the fastest-growing communities in 2025.
Economic challenges
Indiana's overall economic growth is expected to slow to approximately 1.0% in 2026, lagging the national forecast of 1.8% GDP growth. Manufacturing wages in Indiana remain below the national average, and durable goods production has not kept pace with national growth. Rural and mid-sized counties experienced slower population growth in 2025 due to sharp drops in net migration.
Key facts
- Indiana's real GDP grew 2.6% between Q2 2024 and Q2 2025, exceeding the national rate of 2.1%.
- The state's unemployment rate is projected to rise from 3.6% in August 2025 to 4.4% in 2026.
- Indiana added 38,579 residents in 2025, bringing its total population to 6.97 million.
- In December 2025, Indiana was awarded over $29 million in low-interest state loans for housing-related public infrastructure across six communities.
- House Enrolled Act 1210, signed into law in March 2026, prohibits Indiana cities from capping rental density in residential neighborhoods.