The U.S. Housing Market Hotness Index fell to 90.11 for the week ending September 27, 2026, down from 92.09 a week earlier and below its level at the same point last year. The latest reading places the market decisively in the cool zone as higher borrowing costs put additional pressure on an already affordability-constrained housing market. Mortgage rates are becoming an even bigger hurdle for prospective buyers. The average 30-year fixed mortgage rate climbed to 7.28% on October 1, the highest level since November 2023, according to Freddie Mac. The effect is showing up in mortgage demand. Applications fell 6% for the week ending September 25, with purchase applications declining 4% and refinance applications dropping 9%. Both purchase and refinance activity fell to their slowest weekly pace since 2025, according to the Mortgage Bankers Association.
Yet the national slowdown is far from uniform. Housing markets in the Northeast and Midwest continue to outperform much of the country, while many markets across Texas and the Sun Belt remain considerably cooler. That divide is becoming increasingly important as mortgage rates rise. Markets with lower home prices relative to local incomes may have more capacity to absorb higher financing costs, while expensive markets can experience a much sharper pullback in demand.
*Index values are subject to revision as deemed necessary, contingent upon the receipt of new or updated data.
