Associated Bank Thought Leadership Podcast

WGN: We're on with Kim Adams, residential loan officer at Associated Bank. Kim, welcome back.

Kim Adams: Thank you. Hi, Steve.

WGN: One of the first stories I saw out of the gate this new year was how home sales have been surging. Talk to us a little bit about what's going on.

KA: Yes, I saw that too. Great news. And I do think it's all about good things so far. I read that inventory is up about 8% from last year. It's a good, good mixed bag with median incomes increasing and the lower rate environment. The home buyer momentum is building.

WGN: Let's dive a little bit into that. In the Midwest here, the pending home sales index, which is the basis for this story, was up about 1.3%. I think the Midwest had been leading the way. It was down a little bit. There were more gains in the Northeast and out west where we saw numbers up nearly two and a half percent from a year ago. You mentioned the rate environment. Is that really the biggest part of what's driving this, is lower interest rates?

KA: I think so. Again, with that mixed bag of inventory increasing a little bit and again reported median incomes increasing. It's all hopefully giving us a nice a nice start to 2026.

WGN: The inventory part of that, how do they figure that out and what's the driving force behind that? Is it just more houses coming on the market?

KA: More houses coming on the market, more listings, active listings that give buyers more options and just wide-open markets to, you know, get into homeownership.

WGN: The median cost of a home, according to this report, is $409,200. The affordability index shows that the monthly mortgage rates, thanks to that mortgage interest rate dropping a little bit, is down to about, I don't know, $2,089 from a high of about $2,300, so people are finding more money in their wallets and they're being able to afford a mortgage now.

KA: Yes. Even with the increasing median home sale price, you know, with the loan amounts, combination of lower interest rates being in the very low six range right now—it's really helping with their monthly cash flow. You're seeing the principal and interest payments of a loan amount of about what rent is. You do have to add in the taxes and insurance, which will add more costs, but still they're finding it's within reach.

WGN: Kim, I know you don't have a crystal ball, but can you talk to us a little about where you think mortgage rates are going to be this year?

KA: Well, if you can ask me on Friday, that's the jobs report on Friday. I do still think that we are working through the uncertainty of, you know, tariffs and the slower labor market, and you know, other factors in there. But if we do see positive data come out on Friday, that will be impactful, unfortunately that's going to move the needle north a little bit on interest rates,  but if we see less positive data, that might take us down a little bit on the interest rates. We're so close to 5.875, I think when somebody sees the fives, that's going to really boost, you know, more home buyers into the market.

WGN: We've been getting some new economic reports over recent days. One of them is the latest jobs report. And I saw one of the Fed officials talking about this said if the job market remains weak, moving forward or even loses some ground, that might move the Fed to lower interest rates. And I know it's not a direct correlation between the Fed's interest rates and mortgage rates, but it is sort of indirect. So if we see those rates going down, it might push down mortgage rates. We obviously don't want to see the economy get any worse. But there could actually be a silver lining to that for home buyers.

KA: Exactly. Yeah. We do see action the week before the Fed meeting. If there is speculation of the Fed lowering interest rates, we see it the week before and then the week of, we could see a tick up or just stay the same. But there's not really a day-to-day direct correlation with the Fed lowering interest rates. Usually it's a polar effect with us. But, you know, there's no normal really anymore.  

As far as where rates are going this year, you know, we've been talking about low rate, you know, where we're hoping they're going to go down. You know, we've been hoping that for the past three years. And really, it's just again, I know we've talked about this before, but the time to jump in is when the time is right for you. And, you know, the most important is just be prepared to make a move.

WGN: Right. And that's what I'm going to focus on now. I want to maintain an optimistic outlook here. And let's say that the environment gets better as we go through the year. What should people be doing now to get ready for that decision to jump in?

KA: It's really looking at their personal finances. You know, what do they have saved? When I talk to hopeful homebuyers, first-time homebuyers, and we know that we've got a couple of months. Their lease isn't expiring for 6 to 8 months. And our first conversation, I don't ask them what they earn—I ask them how much do they save. Because there are reports out saying that, you know, home prices are getting slowly, a little more affordable. However, it's the down payment that is the obstacle for, especially, first-time home buyers, whereas current homeowners usually can tap into their equity. You know, they can use their net profits to put down for a down payment, whereas first-time home buyers jumping in who, you know, who are saving towards a down payment organically, meaning no help from mom and dad or the uncle or whatever it may be.

WGN: You know, I saw a report that said down payments are the biggest hurdle to homeownership for especially those first-time homebuyers. So, you're right on the money there. And that it takes seven years on average for one of those homeowners, the typical homeowner, to save for a down payment. So this is not something, a decision, that's made lightly. It's something that you might need to even be looking several years in advance toward, right?

KA: Yes. The ideal, minimally a year. If you're a renter out there, minimally a year. Again, down payment is going to drive everything. It's going to drive your purchase price. It's going to drive your monthly payment. It's going to drive your 30-year commitment to a mortgage, you know?

WGN: Yeah. There are some changes coming to the real estate market, real estate industry this year. I want to go over a couple of them. One of them is litigation that we're still seeing in the real estate sector. There's also midterm elections coming up and there's some other challenges as well. What do you see as some of the biggest changes coming this year?

KA​​​​​​​: I honestly thought that the changes really started last year with, and I'm not on that side of the business, however, I do have a Realtor community that I collaborate with, it's really the way the buyer agent is compensated. So, if that's what you're referring to, you know, it was a lawsuit where now the sellers felt like they were forced to pay the buyer Realtor commission and it took away from their net profit. And now there is a difference in contracts where the seller isn't obligated to pay the buying agent commission.

It doesn't really, as far as that, it doesn't really seem to be that much of a thing. I don't see that so much anymore. When it first came out, a lot of my Realtors were like, I'm leaving for a year. I'm going to see how this pans out and I'll be back. But really, it hasn't really affected buyers, what I've seen. And then, you know, it comes to was it really broken? Should it have been fixed? So there's still some reform on the way that is yet to be seen.

WGN: It's one of those situations where the sellers and buyers, they just need to be aware of this and maybe read up on it a little bit and make sure they have all the information going into their either their sale or their purchase. Right?

KA​​​​​​​: Exactly. Yeah. And the Realtors have had to, you know, re-learn how to write a contract and have that initial conversation with their buyers from the start as to how they get compensated for their services.

WGN: One of the other things that I read was that the MLS situation is going to be changing. MLS is the system that is used to advertise these openings, that has the list of all of the different places that are for sale. Right? And there's some consolidation in that area?

KA: Yes. Well, I believe you're referring to the private listing. I do believe they're changing that. Private listings is having the home marketed to a select group before hitting the MLS. It's controversial because it limits the buyers’ choice, and it can unintentionally create housing discrimination. There's also a call for mandatory membership, which forces Realtors to join other associations, which funds a fee to gain access to the MLS.

WGN: Hmm. And then the other thing I saw, too, and this is probably not good for your industry or for even Realtors industry, is that more people might choose to be renters moving forward.

KA: Yeah, I did read as well, that there was a poll that said even if the rates went down, renters would choose to continue to rent. I do think that there is something to be said for renting. It offers more freedom as far as commitment to monthly payments. And, you know, there's a lot of media turmoil in our industry. So that's where you really want to find your tribe. You want to find a good Realtor to educate you. You want to find a good loan officer to inform you of, you know, any changes to the market, monthly payments, pros and cons of homeownership. And it's not a bad idea to talk to an attorney as well.

WGN: Right. And then one of the other predictions I saw was that all of these questions about housing affordability might lead to some government intervention, that maybe there might be some government housing reform on the way..

KA: We're also waiting to hear something Yes, nothing. I haven't read anything. I haven't seen anything. However, any positive contribution to our industry as far as helping homeowners is greatly welcomed. You know, we would love to see 2026 start strong and well manifesting planting where homebuyers hope to blossom.

WGN: And we will leave it on that positive note, Kim. Thank you for joining us. How can people get ahold of you and have a one on one if they want?

KA: You can email me at Kimberly.Adams@AssociatedBank.com or give me a call, 224-522-0515.

WGN: All right, Kim, we'll talk to you next time. Thanks so much.