Falling mortgage rates have led to a small increase in home sales, but the Twin Cities market is still slow.

Why it matters: Homebuyers — especially first-timers — finally got a long-awaited interest rate reprieve, but a slowing labor market has kept many on the sidelines.

By the numbers: The 30-year fixed rate fell from around 6.9% in May to 6.2% in September, though rates have since inched up to 6.34%, per Freddie Mac data.

• September numbers from Minnesota Realtors won't be out for a couple more weeks, but weekly pending sales for the first three weeks of the month were up 6.5%, 5.2% and 9.7% compared with the prior year.

Zoom in: The Twin Cities is bucking trends seen in some coastal markets, where home prices are falling. Here, they continue to grow, albeit slowly.

Between the lines: Minnesota has seen a 1.3% increase in net job creation this year, outpacing national growth of 0.8%, according to the Minnesota Department of Employment and Economic Development.

Yes, but: Frank D'Angelo, president of Minneapolis Area Realtors, told MinnPost that the recent government shutdown, trade wars, partisan gridlock, and the politicization of economic data have hurt consumer confidence, leading to an overall weak year for sales.

What they're saying: Kris Lindahl, CEO of Kris Lindahl Real Estate, recently wrote a LinkedIn post raising concern that a crash in the housing market could be coming, citing a lack of wage growth, depletion of personal savings, rising debt and job uncertainty.

• He told Axios he's seen a surge in local purchase agreement cancellations or expirations this year, a sign that buyers are backing out of deals or making major requests of sellers, who then back out.
• Lindahl said he's also seeing sellers who are now upside down on their homes, many due to cash-out refinances.

Reality check: The Minnesota Realtors report says short sales and foreclosures remain at a very low rate.

• They've been below 2% of total sales since 2019. For some perspective, short sales and foreclosures topped 40% of sales following the 2008 financial crisis.

What we're watching: Whether market corrections in Florida, Texas and Arizona spread to the Twin Cities.

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At least three Twin Cities police departments are using an AI tool to draft police reports from body-worn camera footage, a KSTP investigation found.

Why it matters: AI could be a huge time-saver for short-staffed departments.

• "Less time spent in the office writing reports means more time out on the road, doing police work," Brooklyn Park police inspector Matt Rabe told the TV station.

Driving the news: KSTP found Brooklyn Park, Eagan and Bloomington currently pay for the "Draft One" AI package from Axon, the police tech company behind Tasers and bodycams.

How it works: An AI-generated first draft contains fill-in-the-blank portions that officers must either complete or delete — a safeguard meant to ensure officers are making each police report their own, CNN reported in August.

Friction points: Civil liberties groups fear the tech will introduce AI-fueled biases or hallucinations into police reports — problems that could undermine a criminal case.

• The ACLU also notes that an officer's subjective memories of an encounter are important evidence, and should be recorded "before they are contaminated by an AI's body camera-based storytelling."

Go deeper via KSTP

🏀 Lynx star Napheesa Collier again blasted WNBA commissioner Cathy Englebert. Collier told Axios she cancelled a meeting with the executive over a "lack of accountability" in Englebert's public statements. (Go deeper)

🌮 Chi-Chi's is back! Crowds turned out in St. Louis Park yesterday as the local Mexican restaurant chain opened its first new location in 20 years. One family drove all the way from Ohio to dine on day one. (WCCO)

• A second local outpost is planned for Maple Grove, as Audrey reported in February.

🪙 Kwik Trip will start rounding cash purchases down to the nearest 5 cents in response to the Department of Treasury's decision to stop producing pennies. (Wisconsin Public Radio)

❤️ Volunteer pilots helped transport a Lakeville baby to Boston for life-saving heart surgery. The eight-month-old, Chase Byers, is now back home and recovering. (WCCO)

🏛️ Another longtime state legislator is retiring next year: Sen. Jim Carlson (DFL-Eagan) will step down after 18 years, per a release.

Yesterday was the 20th anniversary of the infamous Vikings love boat scandal on Lake Minnetonka.

Flashback: During the team's bye week in 2005, players rented two boats and flew in sex workers for what became a wild sex party.

• Four players were charged with misdemeanors and head coach Mike Tice lost his job a few months later.

What we're hearing: Samantha Van Ginkel, a lifelong Vikings fan whose husband Andrew now plays for the team, got wind that some people were planning a cruise on the lake for the team's bye week this year.

• So she sent her group chat an article with "allll the details" on the 2005 cruise.

"Safe to say, no one's setting sail this week," she posted on X.

We've got good news for kids with thoughts on how the grown-ups in charge of their town can do a better job.

• The League of Minnesota Cities' "Mayor for a Day" contest is back.

How it works: Fourth, fifth, and sixth graders can enter by submitting a short essay with their response to the prompt "What would you do if you were mayor for a day?"

• Last year's contest drew a record 830 submissions.

The stakes: Unfortunately, the winners will not get a key to their city or power to pass an ordinance requiring an ice cream shop on every block.

• But they will get $100 and a nod in the Minnesota Cities magazine.

The bottom line: Students can enter here by Dec. 12. Winners will be announced in January.