Property Taxes and Inflation Are Causing Hoosiers to Lose Their Homes

The Indy Star now has an update about Indiana having the highest foreclosure rate in the nation and why that’s happening. Listen to the answer. Jordan Smith at the Indy Star wrote the article. Here is a direct quote from it. "Experts say that home prices remain low compared with other states but have risen steeply since 2020, increasing property taxes. Upticks in other expenses like homeowners' insurance and utilities, along with stagnant wage growth, have put an increasing number of Hoosiers at risk of losing their homes." So the answer comes back to the issue the General Assembly refuses to address. They won’t deal with it because they want your property taxes to keep going up. The key factor is the increase in assessed values, which is causing property taxes to skyrocket. If you have a home loan, foreclosure often comes down to escrow. Escrow is the money you put into an account to cover property taxes and homeowners insurance. Government spending and inflation have driven the price of everything higher. It costs far more to insure your home now. I just got my homeowners insurance renewal for this year and it went up again. At the same time, assessments have caused property taxes to soar. The two components that make up escrow have, in many cases, doubled or even tripled. People simply cannot afford the escrow payment. Many homeowners can still make the base mortgage payment, but they can’t cover the escrow portion, which becomes part of that monthly payment. They can pay the actual mortgage cost, but skyrocketing property taxes and insurance have driven escrow payments so high that people can’t keep up. Amy Nelson, executive director of FHCCI, says the recent spike in foreclosure filings is partly due to rising escrow payments for property taxes and homeowners insurance. Look at this data. From 2019 to 2025, Indiana’s average escrow payment rose by more than 50 percent, according to data analytics company Cotality. Today, one-third of the money Hoosier homeowners send to lenders each month goes toward escrow costs. Think about that. One-third of your mortgage payment goes to escrow. That doesn’t even include interest and other costs. Very little of your payment actually goes toward paying down the home. The majority goes toward interest, property taxes, and escrow. That means you’re building very little equity in your home. When repairs or other expenses come up, people quickly find themselves underwater financially. Just stay with me for a second because this data is striking. Last month, about one in every 1,600 housing units in Indiana had a foreclosure filing. In Indianapolis, that number is roughly one in every 1,250. That is three times worse than the national average, right here in central Indiana. This situation is unsustainable. Inflation and property taxes are forcing people out of their homes. It’s not because they don’t have jobs and not because they can’t make the base mortgage payment. It’s because of escrow costs skyrocketing from property taxes the legislature and governor refuse to address in a meaningful way, combined with inflation driven by federal money printing. As a result, people are being forced out of their homes.