Ann Arbor HousingGauge — July 6, 2026 | YELLOW 54

Welcome to the Ann Arbor HousingGauge, your weekly local market report for the week of July 6, 2026.

Here is the headline. Ann Arbor's HousingGauge score is 54 out of 100, which puts the market in the YELLOW zone. Conditions have improved over the past three months, but sellers still hold most of the negotiating leverage.

Three developments stand out this week.

First: Local employment down 6.4% year over year. Unemployment stands at 3.5%.

Second: Median price up 5.9% from a year ago. The median sale price is $487,000; adjusted for inflation, prices are 1.7% higher than a year ago.

Third: Pending sales up 13.5% year over year. Contract signings are a leading indicator of closed sales over the next one to two months.

Now, what is behind the score?

Mortgage Conditions scores 44 out of 100. The 30-year fixed rate averages 6.43%, up 0.28 percentage points over six months. Financing remains expensive, limiting affordability for leveraged buyers.

Supply & Buyer Leverage scores 43 out of 100. Inventory is 11.1% higher than a year ago (339 active listings), with 3.3 months of supply. Homes take a median 35 days to sell at 100.7% of list price, and 21.0% of listings have had a price cut. Sellers retain most of the negotiating leverage.

Monetary Conditions scores 72 out of 100. The real policy rate is 0.59%, 0.50 points below the estimated neutral rate (r-star) of 1.09% — a accommodative stance. The fed funds rate is unchanged over six months. Policy is a tailwind for credit conditions, though it does not by itself move home prices.

Demand Trend scores 79 out of 100. Pending sales are 13.5% higher than a year ago and closed sales are 7.8% higher. Days on market are 12.9% longer than a year ago. Buyer demand is firming.

Valuation & Affordability scores 52 out of 100. The median home costs 5.9 times the median household income. Principal and interest on a typical purchase would take 35.7% of that income at current rates. Inflation-adjusted prices are 1.7% higher than a year ago. Affordability is stretched but not extreme.

Local Economy scores 45 out of 100. Local unemployment is 3.5% and employment is down 6.4% year over year. The local job market is steady.

Rental Economics scores 48 out of 100. A year of median rent equals 5.3% of the median price (a price-to-rent ratio of 19.0). Rents are up 1.3% year over year. Rental economics are middling.

The score is unchanged from last week's report. Over 13 weeks it is up 3 points, from 51 to 54. The largest contributors were Demand Trend (+9.6 points) and Supply & Buyer Leverage (−5.2 points).

So what would move Ann Arbor into the green? It is 15 points away, which would take a broad shift in conditions. Even these changes together would add only about 15 points: 30-year mortgage rate falls below 5.30% (now 6.43%); the Fed cuts more than 0.75 pts over six months (now −0.01 pts); months of supply rises above 5.6 months (now 3.3 months); mortgage rates fall more than 0.50 pts over three months (now −0.03 pts); rent growth exceeds +5.0% (now +1.3%); and policy gap (real policy rate minus r-star) narrows below −1.00 pts (now −0.50 pts).

And what could make conditions worse? Watch for these together: 30-year mortgage rate rises above 7.15% (now 6.43%); pending sales growth slows below 4.0% year over year (now +13.5%); the Fed raises rates more than 0.50 pts over six months (now −0.01 pts); policy gap (real policy rate minus r-star) widens above +0.20 pts (now −0.50 pts); and months of supply falls below 1.9 months (now 3.3 months).

That is the Ann Arbor HousingGauge for this week. The HousingGauge score describes market conditions. It is not a recommendation to buy or sell, and it is not individualized financial advice. For charts, sources and the full methodology, visit housinggauge.com. Thanks for listening.