February 2, 2026—9-10—The Report Card Show—Show 50-93

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   I’m Bill Zortman and for the FIRST TIME in FEBRUARY 2026—WELCOME to our REPORT CARD SHOW---with the first numbers for Home Buying, Selling, and Building for 2026---

   On the first and second Monday’s of EACH MONTH---with the help of the Building Permits---Real Estate Leaders---Home Builders---and Bankers we take our first monthly look at where we are for the year.

   Tony Bachman has been working with me—since back in the days I worked as a Real Estate Agent for him. Now the closest I come to the Real Estate Profession is this show---and others that look and talk about where we are and where we are going.

It’s an exciting time to be looking at the real estate market! The overarching theme for 2026 is a “steadier and stronger”housing market that offers more breathing room for both buyers and sellers.

Here are the key talking points:

1. Expert Forecast for 2026: A Steadier Market

Experts describe 2026 as a “reset year” where the market becomes more balanced. While we aren't "off to the races" with explosive growth, the outlook is very positive for those looking for stability.

• Mortgage Rates: Rates are expected to remain in the low sixes, likely bouncing between 6% and 6.25% throughout the year.
• Price Growth: Nationally, home prices are projected to rise modestly, with an average growth of about 1.6%.
• Inventory & Sales: There is a projected 10% increase in inventory, giving buyers more options than they’ve had in years. Consequently, total home sales are expected to rise from 4.7 million to about 5.1 million.

1. Improving Affordability for Buyers

Affordability is set to improve modestly this year, marking a welcome shift for many families. This is driven by three main factors:

• Wages Outpacing Prices: In a significant win for buyers, wage growth is expected to outpace home price growth in 2026.
• Purchasing Power: Rising incomes combined with steadier mortgage rates are giving buyers more purchasing power.
• The 30% Threshold: For the first time since 2022, the typical monthly mortgage payment is expected to slip below 30% of the median income, falling to roughly 29.3%.
• Breakdown of 2026 Sales Volume
• Existing Home Sales: This segment is forecasted to grow by about 10%, reaching approximately 4.5 million sales. To put that growth in perspective, there were roughly 4 million existing home sales in 2024 and 4.1 million in 2025.
• New Home Sales: Sales of new constructions are expected to tick up moderately to over 700,000 units. This is an increase from the approximately 680,000 new home sales seen annually over the last couple of years.
• Why Volume is Increasing
• This growth in sales volume is driven by several factors that are making the market more accessible for many families:
• Improved Affordability: Mortgage rates are expected to be more accommodating, helping more Americans buy their next home.
• Increased Inventory: More owners are expected to move as "life events" nudge them to sell, and the "lock-in" effect of previous low mortgage rates begins to loosen.
• Pent-up Demand: More buyers who were previously on the sidelines are expected to jump into the market as rates and affordability improve.
• Would you like to dive deeper into how these sales volume numbers vary by region, or are you ready to move on to another topic for your radio segment?
• The loosening lock-in effect drives sales volume by increasing the number of homes available for purchase as long-time homeowners finally decide to move. As the gap between current mortgage rates and the low rates of the past narrows, more sellers feel comfortable re-entering the market.
• How the "Lock-In" Effect Loosens
• The "lock-in" effect occurs when homeowners stay in their current houses because they have sub-4% mortgage rates they don't want to give up. This is expected to change in 2026 due to several key factors:
• Life Events as a Catalyst: Regardless of interest rates, "life events" like marriage, new children, or job changes will continue to nudge owners to move.
• Accommodating Rates: A more accommodating monetary policy from the Federal Reserve is expected to help more Americans feel they can afford their next home.
• Narrowing Rate Gaps: As average mortgage rates are forecasted to hover in the low sixes, the financial "penalty" for moving is becoming less of a barrier for many families.

Back with teddi Mueller----and permit counter Neil King---on our Report card show—with the first numbers of 2026—

9:20/00---KELO Commercials

9:21/30---Report Card Show 2

----------------------Neil King----sees the numbers are counted----and we had numbers that set records as we closed 2025------and now we are wondering what trends Neil sees this morning------

------------------Neil----------------------

       Teddi Mueller----is with us-----share with us your upcoming events---and what you see ahead---next 90 days---

--------------Teddi-----------------

        You did have a change with Craig Wynia added and Cory Hjellming finishing his term---tell us about Craig----((IF he is not with us)---and if he is we’ll do a conversation---

We’ll visit with more of those in our Report Card Show----including the bankers and yes the merchants that keep us informed---as well as you our audience.

We’ll check with the Kelly’s following Fox Business News---

9:29/00—KELO Commercials

9:30/30---Fox Biz News

9:32/30---Report Card Show 3

  Quite the husband and wife team join us in our Report Card Show---and the following week the Remodelers Show.

  Dave Kelly and his wife Kelly Kelly---

What do you want to share this morning---

Please see what I would like to review.  KK will also be there.  See you at 9:30!

Friday, the bond market and the stock market were both lower after President Trump announced his nomination for the next Fed Chair would be Kevin Warsh.  Even though Warsh has said that the Fed needs to be cutting faster, he is being viewed by markets as ‘less dovish’ than both Rieder and Waller who were the other lead candidates. 

Warsh has experience on the Fed and served on the board of Governors from 2006 to 2011.  He has also been very critical of the current Fed and their handling of monetary policy leading to the huge rise in inflation during their watch.  We believe Warsh will be more forward looking and see through some of the lags in inflation, as well as overstatement in the jobs figures.

Mortgage rates are also higher due to the Producer Price Index (PPI) for December was released showing that headline inflation rose 0.5% which was more than the 0.2% that was expected. 

Other things to discuss…affordability continues to be an issue.

Dave Kelly

Branch Manager

Certified Mortgage Planner

NMLS# 509205

Licensed in SD, ND, IA, MN and WI

We’ll talk with Past President of the South Dakota Home Builders Association----and our usual players that could join us this morning---in our first Report Card Show with 2026---numbers

9:43/00—KELO Commercials

9:44/30---Report Card Show 4

  Todd Boots is a past President of the Home Builders Association in South Dakota…he can tell us how it was his year in office---and what he is hearing in 2026---

----------------Todd-----------------

    Your business—what you are seeing---and what kind of requests are you getting---

-----------------Todd----------------

  Jerry Berg---Intek---

  Joe Hansen—Extreme Heating and Cooling

  Steve Swenson---The Handy Man---

  Teri Mueller----Home Builders Association

  And------

9:55/50—KELO Commercials

9:57/45---Report Card Show 5

  Yes it’s our first Report Card Show with 2026 numbers---and we’ll be be back with the Remodelers Show next week—which should give us even more trends with us to share with our audience---

   We have been doing the report card show and other building permits—home sales—and yes those that take care of home owners for 10 plus years---

   Having been a part of the Real Estate Association for a number of years---we know that there are a lot of events—and a lot of questions that are out there---about who is selling—who is buying---interest rates---and those merchants that are taking care of those trying to keep their home as modern and updated as possible.

    Coming up in our 10:00 show---always on the first Monday of the month we talk with Mr. Auction---Chuck Sutton----and Mr. Lincoln County Jim Schmitz---about what he is seeing in the rural areas---and in groups he serves not only in his county—across South Dakota but other in our region.

    You can listen to the show live—or on-line Norm Anderson posts the podcast---I write a blog—and we try to serve our listeners as best we can.

    For now ---our time is up—Thank you for yours…