Episode summary
How inflation is impacting mortgage rates
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami says the latest PPI reading was commodity-driven and fits a broader inflation backdrop that is still pressuring mortgage markets, even if the 10-year yield has not yet broken above his 4.50% to 4.60% danger zone. He argues mortgage rates are being cushioned by better mortgage spreads, which is why rates are around 6.57% even as inflation, oil prices, and geopolitical conflict keep rising.
On housing demand, Logan says purchase application data is still holding up better than many expected: it is positive week to week and year over year, and weekly pending sales are at a multi-year high. He argues that the key signal is not one week of data but a sustained run of 12 to 14 positive weeks, and that the market has looked stronger since mid-June despite higher rates, snowstorms, and conflict.
For the second half of the year, Logan sees a policy stalemate at the Fed rather than an immediate move in either direction. He says there are not enough hawks to force hikes and not enough doves to force cuts, but if the conflict ends and oil prices fall, rates could ease. His peak forecast is a 10-year yield near 4.60% and mortgage rates near 6.75%; if those levels are broken, housing demand should slow.
Key takeaways
- Logan Mohtashami says the latest inflation print was commodity-driven and adds pressure to rates, but the 10-year yield has not yet exceeded his 4.50% to 4.60% warning zone.
- Mohtashami says mortgage rates around 6.57% are being held down by better mortgage spreads, not by a friendly inflation backdrop.
- He says purchase applications are still positive week to week and year over year, and he wants 12 to 14 straight positive weeks before calling it a real trend.
- Mohtashami’s peak forecast is a 10-year yield near 4.60% and mortgage rates near 6.75%, levels that would likely slow housing demand.
- He says the Fed is in a stalemate, with too few hawks for hikes and too few doves for cuts.
Notable quotes
“the inflation data is going to be um uh uh not beneficial. However, with that said, we still haven't gotten to that 450 460 level on the 10ear yield”
“purchase application data came out positive year-over-year, positive week to week”
“Mortgage rates are uh um 6.57 I think. uh we haven't hit the yearly high in mortgage rates even though the 10-year yield is is is at a yearly high”
“there's not enough hawks to do hikes. There's not enough doves to do cuts”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Motoshami to talk about more inflation data and what that's doing to mortgage rates as well as what he thinks mortgage rates are going to do by the end of the year. Are they going to go up or down?
Before we get into that, I want to thank our sponsor, Total Expert, for making this episode possible. Logan, welcome back to the podcast. It is wonderful to be here.
I did my civic duty today. I saved a squirrel.
Oh my gosh. Okay. You are like Dr. Doodle Little. You have so many animals at your house that you have rescued and saved. — Yes. And I And it remind me I I I took in two stray cats about two years ago and it took me about a year to get both of them in. But when I'd feed them at night, you know, psums would come,
Right?
You know, and then like, you know, at 1:00 at night, I'd go down, open the door, there's like three big fat pawsums, and they look at me like, "What? You've left the food out here. what do you want?
You know, so I called them the League of Extraordinary Gentlemen. And like one night I was coming home and one of the possums was walking right with me, you know, and I was looking at him looking like, "Hey, what's up, homie? What up?
You know, and then it went up the tree as I was going up the door. But yeah, this this squirrel is just like it's a little baby squirrel sitting outside the garage and the police said they're lost its mom looking for food. But I did my civic duty and we're off now to the PPI inflation report and purchase application data, mortgage rates.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- inflation impact
- mortgage rates
- interest rate outlook
- mortgage purchase apps
- housing market
Companies and tickers mentioned
- Total Expert
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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