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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 July, our analysis of current data puts the Climate Index at 54.2 out of 100, keeping the index in Partly Cloudy territory for the 48th 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 July’s Homebuying Climate Index?
🏦 Mortgage rates: How much are buyers paying in interest?
[1]
Lower mortgage rates make borrowing more affordable, so they’re weighted heavily in our Climate Index — if mortgage rates move down, that will quickly push the Index toward Sunny. Unfortunately, that’s not what’s happening this month.
Mortgage rates averaged 6.49% in June, according to Freddie Mac’s weekly survey. And July’s average mortgage rate has reached 6.51% — the highest in nearly a year. And we don’t expect much improvement in the short term. As conflict in the Middle East drags on, that puts upward pressure on oil prices, which means inflation and mortgage rates are likely to stay elevated.
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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.
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:
Isabella Angelos and Johanna Arnone contributed graphic design support to this project. Some of these graphics were created using HTML code written with the assistance of AI, and all have been reviewed by our editorial team for accuracy and quality.
INDEX METHODOLOGY
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)
[6]
, 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)
1.Freddie Mac Primary Mortgage Market Survey. 30-year Fixed-Rate Mortgage. Accessed Jul 30, 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 Jul 28, 2026.3.FRED, Federal Reserve Bank of St. Louis. U.S. Bureau of Economic Analysis, Real Disposable Personal Income [DSPIC96]. Accessed Jul 30, 2026.4.FRED, Federal Reserve Bank of St. Louis. U.S. Bureau of Labor Statistics, Unemployment Rate [UNRATE]. Accessed Jul 2, 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 Jul 24, 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.
About the author
Jeanette Margle leads the home loans content team at NerdWallet, where she has worked since 2019. Previously, she led NerdWallet’s travel rewards content team and spent three years editing for Upgraded Points while self-employed as an editor and writing coach.
Jeanette earned bachelor’s degrees in journalism and Plan II Honors from the University of Texas at Austin and has a Master of Education from the University of Houston. A lifelong Texan, Jeanette grew up in a small town in the Hill Country and lives in the Houston area with her husband and daughters.
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