Episode summary
Are 9% mortgage rates possible?
HousingWire Daily
· · 20 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that 9% mortgage rates are not the base case and would require a very bullish U.S. economy, worse mortgage spreads, and a much higher 10-year yield. He said the recent move in rates was driven by a jump in the 10-year Treasury toward 5.27%, but that getting to 9% would also require nominal growth to stay strong, the Fed to remain hawkish, and no softness in consumption or investment. He added that even his 8% rate scenario is now looking less likely because mortgage spreads improved instead of worsening.
A major part of the discussion focused on how geopolitics and politics are moving bond markets. Logan said Trump headlines about sanctions relief and the broader Iran conflict have had only temporary effects on yields, while the larger problem is the market's reaction to the possibility of prolonged conflict and the post-midterm political timetable.
On housing, Logan said inventory is still growing only in low single digits despite easier comps and mortgage rates near 7.5%, while weekly demand took its first noticeable hit of the year. He stressed that higher rates are cooling price growth, but he sees no path to a 20% home price crash and said the tracker points to a slower, healthier normalization rather than a sharp break.
Key takeaways
- Logan Mohtashami said 9% mortgage rates would require a much stronger economy, worse spreads, and a 10-year yield near 6%.
- He said his 8% mortgage-rate scenario is fading because mortgage spreads improved instead of worsening by roughly 23 basis points.
- Mohtashami said Trump-related headlines around Iran and sanctions have only mild, short-lived effects on Treasury yields now.
- He said housing inventory is still rising only in low single digits even with mortgage rates near 7.5%.
- He said weekly demand saw its first noticeable hit of the year, but there is still no path to a 20% home price crash.
Notable quotes
“the question is can 9% mortgage rates happen”
“You really need mortgage spreads to get better”
“You have to be super bullish on the US economy and you have to have the spreads get worse”
“There is no path to a 20% crash”
How the episode opens
Welcome everyone. I'm joined today by lead analyst Logan Motashami to talk about whether we could actually see 9% mortgage rates. We'll also talk about mortgage spreads.
Before we dive in, here are the top five trending articles on housingwire.com. First, we have mortgage rates have gone wild, so what's next for housing? Followed by where builder discounts are biggest and who is still buying.
Then we have CFPB examiner sues bureau over race discrimination claims and UWM names Vandad Farkhtaj as first chief investment officer. Finally, we have MLSs are changing, so is their relationship with realtor associations. Okay, we are ready to go.
Wow, so much happened when I was off. Logan, welcome back to the podcast.
Welcome back, Sarah Wheeler. Looks like you had a wonderful wedding for your daughter and um Yeah, it's it's it's been crazy. Uh uh it was another crazy weekend.
It was another crazy morning. You and I were going to headline something else, but just before I come on, a surge of people are like sending me messages, 9% rates, 9% rates, and I was like what happened? And then I sit there and uh Selma Hepp, who's a very dear friend of mine, um and she's the uh chief economist for Freddie Mac, uh her and I will actually be speaking at at the CAR event next week.
Uh she went on CNBC today and the headline is I I don't I didn't I I haven't even seen the video or anything, but it said is 9% mortgage rates a possibility? Which was funny because I'm sitting here and it this is Monday morning, so the 10-year yield got up to 527 and I'm 13 basis points away from my 540 possible 8% mortgage rate and rates were 750 and I was like, "Oh, it's not going to work.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- housing market tracker
- mortgage lending
- housing affordability
- market outlook
Watch the episode
Watch “Are 9% mortgage rates possible?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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