Ann Arbor HousingGauge — September 21, 2026 | YELLOW 46

Welcome to the Ann Arbor HousingGauge, your weekly local market report for the week of September 21, 2026.

Here is the headline. Ann Arbor's HousingGauge score is 46 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 5.7% year over year. Unemployment stands at 3.5%.

Second: Inventory up 29.2% year over year. 350 homes are listed for sale, equal to 3.0 months of supply.

Third: Mortgage rates up 0.48 points in three months. The 30-year fixed rate averages 6.95%, versus 6.47% three months ago.

Now, what is behind the score?

Mortgage Conditions scores 19 out of 100. The 30-year fixed rate averages 6.95%, up 0.73 percentage points over six months. Financing remains expensive, limiting affordability for leveraged buyers.

Supply & Buyer Leverage scores 57 out of 100. Inventory is 29.2% higher than a year ago (350 active listings), with 3.0 months of supply. Homes take a median 41 days to sell at 99.4% of list price, and 33.7% of listings have had a price cut. Negotiating leverage is fairly balanced between buyers and sellers.

Monetary Conditions scores 53 out of 100. The real policy rate is 1.24%, 0.23 points above the estimated neutral rate (r-star) of 1.01% — a near neutral stance. The fed funds rate has risen 0.24 points over six months.

Demand Trend scores 53 out of 100. Pending sales are 2.3% higher than a year ago and closed sales are 0.3% lower. Days on market are 10.8% longer than a year ago. Demand is steady.

Valuation & Affordability scores 57 out of 100. The median home costs 5.8 times the median household income. Principal and interest on a typical purchase would take 36.7% of that income at current rates. Inflation-adjusted prices are 3.3% lower 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 5.7% year over year. The local job market is steady.

Rental Economics scores 46 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 0.8% year over year. Rental economics are middling.

The score is down 3 points from last week's report (49 to 46). Over 13 weeks it is down 8 points, from 54 to 46. The largest contributors were Demand Trend (−3.9 points) and Mortgage Conditions (−3.8 points).

So what would move Ann Arbor into the green? It is 24 points away, which would take a broad shift in conditions. Even these changes together would add only about 18 points: 30-year mortgage rate falls below 5.80% (now 6.95%); pending sales grow more than 15.0% year over year (now +2.3%); the Fed cuts more than 0.55 pts over six months (now +0.24 pts); policy gap (real policy rate minus r-star) narrows below −0.90 pts (now +0.23 pts); months of supply rises above 5.3 months (now 3.0 months); and mortgage rates fall more than 0.15 pts over three months (now +0.48 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 7.40% (now 6.95%); pending sales fall more than 3.5% year over year (now +2.3%); the Fed raises rates more than 0.60 pts over six months (now +0.24 pts); and policy gap (real policy rate minus r-star) widens above +0.80 pts (now +0.23 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.