Ann Arbor HousingGauge — August 24, 2026 | YELLOW 47

Welcome to the Ann Arbor HousingGauge, your weekly local market report for the week of August 24, 2026.

Here is the headline. Ann Arbor's HousingGauge score is 47 out of 100, which puts the market in the YELLOW zone. Conditions have weakened over the past three months, and financing remains expensive.

Three developments stand out this week.

First: Local employment down 7.1% year over year. Unemployment stands at 3.4%.

Second: Score down 11 points over 13 weeks. The score moved from 58 to 47 over the past 13 weeks, driven mainly by Monetary Conditions (−3.4 points).

Third: Median price up 10.8% from a year ago. The median sale price is $499,000; adjusted for inflation, prices are 7.2% higher than a year ago.

Now, what is behind the score?

Mortgage Conditions scores 32 out of 100. The 30-year fixed rate averages 6.65%, up 0.64 percentage points over six months. Financing remains expensive, limiting affordability for leveraged buyers.

Supply & Buyer Leverage scores 44 out of 100. Inventory is 16.1% higher than a year ago (332 active listings), with 2.5 months of supply. Homes take a median 38 days to sell at 100.3% of list price, and 28.9% of listings have had a price cut. Sellers retain most of the negotiating leverage.

Monetary Conditions scores 61 out of 100. The real policy rate is 1.23%, 0.14 points above the estimated neutral rate (r-star) of 1.09% — a near neutral stance. The fed funds rate is unchanged over six months.

Demand Trend scores 65 out of 100. Pending sales are 4.3% higher than a year ago and closed sales are 10.0% higher. Days on market are 15.2% longer than a year ago. Buyer demand is firming.

Valuation & Affordability scores 43 out of 100. The median home costs 6.1 times the median household income. Principal and interest on a typical purchase would take 37.4% of that income at current rates. Inflation-adjusted prices are 7.2% higher than a year ago. Prices are stretched relative to local incomes.

Local Economy scores 46 out of 100. Local unemployment is 3.4% and employment is down 7.1% year over year. The local job market is steady.

Rental Economics scores 43 out of 100. A year of median rent equals 5.1% of the median price (a price-to-rent ratio of 19.7). Rents are up 0.6% year over year. Rental yields are thin relative to prices.

The score is unchanged from last week's report. Over 13 weeks it is down 11 points, from 58 to 47. The largest contributors were Monetary Conditions (−3.4 points) and Supply & Buyer Leverage (−3.0 points).

So what would move Ann Arbor into the green? It is 22 points away, which would take a broad shift in conditions. Even these changes together would add only about 17 points: 30-year mortgage rate falls below 5.50% (now 6.65%); the Fed cuts more than 0.75 pts over six months (now −0.01 pts); policy gap (real policy rate minus r-star) narrows below −1.00 pts (now +0.14 pts); months of supply rises above 4.8 months (now 2.5 months); pending sales grow more than 15.0% year over year (now +4.3%); and mortgage rates fall more than 0.50 pts over three months (now +0.14 pts).

And what could make conditions worse? Any one of these could push the score down a status level: 30-year mortgage rate rises above 7.50% (now 6.65%); pending sales fall more than 7.0% year over year (now +4.3%); the Fed raises rates more than 0.70 pts over six months (now −0.01 pts); and policy gap (real policy rate minus r-star) widens above +1.25 pts (now +0.14 pts).

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.