June 22, 2026—9-10—Special Report Card Show---52-42

T((((From the Blackburn Studios in Downtown Sioux Falls—Become a Blackburn PROTECTED HOME)))))

(((MUSIC—THIS OLE HOUSE))))

(((YEE HAH---I’m Bill Zortman and WELCOME to our It’s YOUR BUSINESS SHOW---yes a Special Monday Show----as we are about to close the doors on the 1st half of housing numbers for the 2026---year—and because of the July 4th Holiday—that might interrupt the start of the 2nd half of the year---we are doing a SPECIAL REPORT CARD SHOW that has been busy and encouraging in just short of 6 months.

The 4th of July is on a Saturday this year—and could well---keep us away from doing the 1st---Report Card Show in July—until July 13th. So today—we have asked a number of those that participate in our Report Card and Remodelers Shows---if they would join us this morning—to report what they have seen----just short of the 1st hof of 2026.

We think you will learn something----and appreciate all that has been done in 2026 so here are Tony Bachman’s notes

June 22, 2026.  Why Pending Sales Are Rising Despite Higher Mortgage Rates

The housing market is sending a seemingly contradictory signal: pending home sales are rising even as 30-year mortgage rates hover in the 6.5%–6.6% range. Nationally, the NAR Pending Home Sales Index climbed 3.8% in May 2026 alone, hitting a six-month high, with year-over-year contracts up 4.8%. Locally, the Sioux Falls/Brandon metro is outperforming — Brandon home prices are up 5.8% year-over-year and homes are selling in just 29 days on average (versus 76 days last year). This briefing explains, from an economist's perspective, exactly why this is happening — and what the next 3–6 months look like.

Why are Pending Sales rising despite higher rates?

1. Pent-up demand has reached a breaking point~ for last couple years millions of American households have sat on the sidelines waiting for rates to drop or for prices to drop.
2. "Rate Acceptance" — The New 6% Psychology
   
   In 2023, buyers froze because 7% rates felt like an emergency. By mid-2026, 6.5% is the weather — it's not what you wanted, but you dress for it and go anyway. Data from the Mortgage Bankers Association confirms that buyers have stopped waiting for 3% rates; 6.0%–6.4% is now viewed as a "good rate" by most active buyers. This psychological shift is one of the most important — and underappreciated — economic forces in the current market. When consumers accept a new price environment as permanent, demand unfreezes.
3. The "Lock-In Effect" Is Finally Easing

This is a critical structural story. Since 2021, homeowners who locked in 2.5%–3% mortgages refused to sell, because doing so would mean trading a sub-3% loan for a 6.5% one. This "mortgage lock-in effect" strangled inventory and paradoxically kept prices high even as affordability worsened. Now, for the first time, more Americans hold mortgages above 6% than below 3%. This crossover is significant: sellers with a 6% rate are no longer giving up a golden handcuff if they buy at 6.5%. The financial penalty of moving has shrunk dramatically, unlocking mobility.

One in three home sellers in spring 2026 is giving up a mortgage rate below 5% to list — a dramatic shift from 2023–2024, when virtually no one with a sub-5% rate would list.

1. "Life Events" Are Winning Over Rate Math — The "5 Ds"

Economists have long known that housing turnover is ultimately driven by life, not markets. The "5 Ds" have been accumulating for four years:

• Divorce — the mortgage still exists; one party must leave regardless of the rate
• Downsizing — empty nesters who planned to sell in 2022 are now four years older; quality-of-life now outweighs the rate math
• Death / Estate transitions — inherited properties must be sold
• Departure (Job relocation) — return-to-office mandates and new job opportunities don't care what your mortgage rate is
• Debt — financial pressure from inflation and other obligations forces decisions

NAR data confirms that 36% of agents report their clients are listing specifically due to personal life circumstances — not market timing. Over 40% of all seller activity nationally is now driven by these trigger events.

1. Rising Inventory Is Creating Its Own Momentum

When buyers see more choices, they move. New listings nationally surged 21.2% from February to 439,000 in March — the freshest inventory buyers have had in several years. Nationally, total for-sale inventory rose about 1% year-over-year to near a five-year high. More inventory means more transactions, and more transactions beget more transactions as trade-up buyers sell, creating a positive chain reaction.

1. Wages Have Outpaced Home Price Growth in Affordable Markets

Realtor.com's 2026 forecast projects that housing affordability is actually improving as incomes outpace inflation, pushing the typical payment-to-income ratio below 30% for the first time since 2022. In markets like Sioux Falls, where the median home price is roughly $327K–$344K — well below the national median — income growth has meaningfully improved buying power even without rate relief.

Hopefully, we will have June’s numbers by Monday July 7th

-----------Tony—Neil King-----Teddi Mueller------and?

----if you in our audience have some ideas on questions on housing please feel free to call us at 336-1320----and we’ll talk about your concerns-----

 -----This is a Special Report Card Show----as we get ready to close the first 6 months of 2026.

 Yes we are welcoming your calls this morning to share what you have seen as well as your specific question—call us at 336-1320----

9:16/00—KELO Commercials

9:17/30-----Special Record Card Show 2

    Monday’s 9-10 have become a special day that we include the latest trends in buying and selling housing---building----and what merchants are seeing as well. The calendar really would work against us as we will close the first 6 months of 2026---with July 4th coming on a Saturday this morning---and that could ultimately keep us from seeing the numbers for the first 6 months of 2026---until Monday---July 13th—so with a number of those that are part of the Report Card and Remodelers Shows on Monday’s---we decided to get the trends they are seeing with just a little more than a week left before we go to July and the 2nd half—

---Neil----Todd Boots----Janelle Cain-----

---when we come back we’ll talk about the 2nd half of 2026---with Dave Kelly---who can quote and share banking thoughts in the final days of the first half of 2026---and look ahead to what interest rates and more might be doing----

9:29/00—KELO Commerials

9:30/30---Fox Business News

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

  For just joining us---we wanted to do a special Report Card Show today to give you some insights as to what we have seen in nearly the first 6 months of 2026----We have called together a number of those that work our Report Card Show and Remodelers Shows every month-----on Monday---

   From the Banking side—Dave Kelly ---longtime mortgage banker---is a constant part of the show----and keeps us informed what they are seeing from the government and banks—on interest rates and opportunities--- his wife KELLY KELLY works another side of the ledger---and between them we get quite an understanding of where we are and where we are going---

----Dave---just 9 days short of closing the first half of 2026---what are you seeing---where do you see us going----and what should that mean for those in our audience---that may need your services----or help in buying or closing a home---

----------------------Dave-------------------

    Interest rates---where are we---what seems to be the general consensus on where we will go in the 2nd half of 2026------and how should those that will need the help –be smart about what to expect---

------------------Dave------------------

    Tony posed a question you should answer---why pending sales are rising despite higher mortgage rates---and why are pending sales rising despite those higher rates?

     Do you agree with Tony that the Lock-in Effect is Finally easing ---and that life events are winning over rate math—

     Advise for each buyer is subject to their own needs---but generally speaking---where are we and where are we going in the 2nd half of 2026?

----Dave Kelly thanks for the update—and we’ll see you in July---

--still more to come in this special Housing Show---the last of 2026---

9:44/00—KELO Commercials

9:46/00---Special Report card Show 4

---Todd Boots----former SD State Housing President

---Steve Swenson------Vendor

---Janelle Cain---here side of the equation

---Tony----Neil---and audience-----

------That will be our last Report Card Show—until we hit the 2nd half of 2026---in July---the shows have traditionally been on Monday 9-10---and we may see a show on the 4th of July Weekend on July 6th---or perhaps as late as July 13th----

---We’ll get you ready for our 10:00 Agri Business Show when we come back—

9:54/00—KELO Commercials

9:56/00---Special Report Card Show 5

   Our Report Card show that we started almost a dozen years ago—continues to be one of the most quoted shows in our area. The people in the business---sharing what they know for long business audience---and the show of course is available live---or later in the day as a podcast on our KELO AM Webb-site-----look up the 9:00-10:00-show—go to that specific date---and you’ll even have our notes tacked on for you to follow. Housing is important—the buying the selling---the building and all that goes with it. We continue to keep you informed—as best we can—with the 6 or so guests that are in the show that deal with what is happening every business day.

   Our 10:00 Ag Business show—is next---and of course agriculture is the #1 industry in South Dakota –so half our shows are business---and we bring in those in the industry---those making a living from it---and give you those elected officials who like to join in.

   For now—our time is up—Thank you for yours!!!!!