Each month, the NerdWallet Homebuying Climate Index puts a single number — and a familiar weather label — on how favorable conditions are for home buyers. For September, our analysis of current data puts the Climate Index at 53.5 out of 100, keeping the index in Partly Cloudy territory for the 50th straight month as most variables hold relatively steady.
NerdWallet's Homebuying Climate Index combines five indicators linked to homebuying activity: mortgage rates, home price growth, disposable income, unemployment and building permits. Below, we break down what's affecting recent conditions, how today compares with the past three decades and what it means if you're weighing whether to buy.
What's affecting September's Homebuying Climate Index?
🏦 Mortgage rates: How much are buyers paying in interest?
Source: Freddie Mac Primary Mortgage Market Survey
Lower mortgage rates make borrowing more affordable, so they're weighted heavily in our Climate Index — if mortgage rates move downward, that will push the Index toward Sunny. Unfortunately, that's not what's happening this month.
Mortgage rates have been on an upward trend all summer, and in September rates averaged 6.86%, according to Freddie Mac’s weekly survey — the highest monthly average since January 2025. And we don’t expect much improvement in the short term. Inflation and other economic forces are keeping bond yields elevated, and mortgage rates are rising right along with them.
🏠 Home price growth: Is the housing market healthy enough to support ongoing price appreciation?
Source: Federal Housing Finance Agency
We track the month-over-month change in FHFA’s Home Price Index, with upward motion pushing the Climate Index sunnier. You might think higher home prices are automatically bad for potential buyers, but we look at this variable as an indicator of a healthy, active housing market: Is demand strong? Are sales brisk enough to create some competition and encourage sellers to list? And are buyers confident that home values won’t fall right after they buy?
While home price growth has slowed from the fast-appreciating months of 2021-2022, we’re still seeing mostly positive month-over-month numbers this year. However, any upward movement has been small — this variable is having a positive impact on the Index, but it’s limited.
💵 Real disposable income: Is income beating inflation, so buyers have available cash?
Source: U.S. Bureau of Economic Analysis
An increase in real disposable income means people have more money left to spend or save after taxes (adjusted for inflation). We track this variable as a month-over-month change. Though it tends to move in a narrow range, income growth means take-home pay will stretch further — toward a down payment or mortgage payment, for example.
Positive momentum for incomes, especially relative to inflation, can help improve the climate for homebuying. That’s not what we’re seeing now, though — the most recent data shows disposable income actually fell slightly month over month, for the first time since April. Still, the movement in recent months has been relatively small — so this variable isn’t hurting our Index too much.
💼 Unemployment rate: How strong is the job market, from the perspective of home buyers?
Source: U.S. Bureau of Labor Statistics
If more people are steadily employed, more people are likely to qualify for a mortgage and feel confident committing to one. A low unemployment rate will strengthen our Climate Index.
That’s what we’re seeing currently. Even though you might be hearing stories of layoffs or know people who are having a hard time looking for work, the labor market is broadly holding up — especially from a historical perspective. August’s unemployment rate of 4.1%, released Sept. 4, is doing a lot to prop up the Index this month, and this figure has been improving since February.
🏗️ Building permits: Are home builders planning to add to the home supply?
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development
As builders get approval to build more homes, that means more homes will likely be for sale in the months ahead. If building permits increase, that has a positive impact on our Climate Index, since buyers will have more options and less competition.
August’s data, released in September, shows a tiny decrease, and building permits are still depressed from recent highs in 2022. At this relatively stable level, permits aren’t necessarily hurting the Index, but they’re not helping a ton either.
Should I buy a house right now?
How has the Index moved over time?
Since the datasets we're tracking have a long history, you can see how the current moment compares to highs and lows over the past 30+ years.
☀️ All-time high: Sunny (89.5) in March 2021
In early 2021, unemployment was declining from its pandemic peak, as mortgage rates remained low and disposable income increased quickly due to COVID stimulus payments. Building permits were also moving upward from pandemic lows, and home prices were appreciating quickly as the market gained steam.
☁️ All-time low: Overcast (30.9) in April 1991
At this period in the early '90s, mortgage rates were hovering around 9.5%, unemployment was rising, and building permits were low. Though disposable income was showing slight gains, home prices were barely budging, signaling a stagnant market.
What does the Index NOT represent?
NerdWallet's Homebuying Climate Index is built from public, national-level data — it doesn't account for market variations by geographic region, and it can't consider how your household's finances compare with the national picture. Think of it more as The Weather Channel's big U.S. map, not the hourly forecast for your zip code.
National statistics can only go so far in helping you decide whether it's a good time to buy a house. The best time for you will always depend on your financial and personal readiness. And even though we have the historical data at a glance, don’t get caught up in worrying that the best time is behind you. (Do I wish I’d bought three houses in 2021? Sure. Would that have been financially feasible? Definitely not.)
If you’re curious about how the math could play out for your situation, our experts created the best resources to help you get started:
To stay informed, check out NerdWallet's mortgage news hub for all our latest coverage.
INDEX METHODOLOGY
Cite as NerdWallet (2026). “September 2026 Homebuying Climate Index.” Retrieved from https://www.nerdwallet.com/mortgages/news/homebuying-climate-index
NerdWallet's Homebuying Climate Index is a composite index, updated monthly to represent the latest federal data on five economic indicators: mortgage rates, home price growth, disposable income, unemployment, and building permits.
Our data sources and variable weights are as follows:
35%: Mortgage rates (Freddie Mac Primary Mortgage Market Survey, 30-year fixed rate)
20%: Home price growth (Federal Housing Finance Agency House Price Index, month-over-month change)
20%: Real disposable income (U.S. Bureau of Economic Analysis, month-over-month change)
15%: Unemployment rate (U.S. Bureau of Labor Statistics)
10%: Building permits (U.S. Census Bureau and U.S. Department of Housing and Urban Development)
These weightings are editorial judgments informed by the hierarchy established in Dua, Miller, & Smyth (1999) , where mortgage rate is the dominant predictor and building permits function as a leading indicator of homebuying activity. We scale each variable scaled on a range of 0-100, relative to the historical minimum and maximum for that variable looking back to 1991.
Each of the five weighted scores are summed into a single Index value from 0-100 and then mapped to a corresponding climate label:
☀️ Sunny (80–100)
🌤️ Mostly Sunny (60–79)
🌥️ Partly Cloudy (40–59)
☁️ Overcast (20–39)
⛈️ Stormy (0–19)
Article sources
- 1.Freddie Mac Primary Mortgage Market Survey. 30-year Fixed-Rate Mortgage. Accessed Sep 24, 2026.
- 2.FRED, Federal Reserve Bank of St. Louis. U.S. Federal Housing Finance Agency, Purchase Only House Price Index for the United States [HPIPONM226S]. Accessed Sep 28, 2026.
- 3.FRED, Federal Reserve Bank of St. Louis. U.S. Bureau of Economic Analysis, Real Disposable Personal Income [DSPIC96]. Accessed Sep 30, 2026.
- 4.FRED, Federal Reserve Bank of St. Louis. U.S. Bureau of Labor Statistics, Unemployment Rate [UNRATE]. Accessed Sep 4, 2026.
- 5.FRED, Federal Reserve Bank of St. Louis. U.S. Census Bureau and U.S. Department of Housing and Urban Development, New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units [PERMIT]. Accessed Sep 25, 2026.
- 6.The Journal of Real Estate Finance and Economics . Using Leading Indicators to Forecast U.S. Home Sales in a Bayesian Vector Autoregressive Framework. Accessed Jun 10, 2026.
