Episode summary
How war with Iran could affect mortgage rates
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that the Iran war has pushed mortgage rates higher, but only modestly so far. He says the initial market reaction sent money into bonds on Sunday night, yet the move has not been dramatic: the 10-year yield touched a yearly low near 3.92% and mortgage rates moved from 5.99% to 6.12%. In his view, the key question is escalation, not the first strike, and he does not think markets are fully pricing in a prolonged conflict yet.
He links the rate backdrop to a busy macro week, including jobs data, retail sales, and hot inflation readings. Mohtashami says the ISM prices-paid index and PPI were both strong enough to keep 3% plus PCE inflation in view, which matters more to him than the war alone. He also says the 10-year yield near 4.05% and mortgage rates near 6.12% are still low by recent standards, especially given the severity of the headlines.
On housing, he says the tracker showed a seasonal drop in inventory and new listings, while weekly pending sales improved and rates slipped below 6% at one point. His bottom line is that the Iran situation is a live risk, but economic data and inflation will likely drive mortgage rates more than geopolitics unless the conflict escalates further.
Key takeaways
- Mohtashami says the Iran war has lifted mortgage rates only modestly so far, with 30-year rates around 6.12% and the 10-year yield near 4.05%.
- He argues the market is not yet fully pricing in a prolonged escalation, and says oil has not spiked enough to force a bigger repricing.
- He says hot ISM prices-paid and PPI data matter more for mortgage rates than the war alone because they keep 3% plus PCE inflation in play.
- He thinks the economic calendar this week—jobs, retail sales, and Fed speeches—could matter more for rates than the geopolitical news.
- He says housing fundamentals in the tracker were still firm, with weekly pending sales positive and seasonal inventory declines continuing.
Notable quotes
“escalation is the key to any of these situations”
“I just don't think the market is is fully believing yet that this is going to be an escalated event”
“the 10-year yield got to a yearly low at 392, we saw a a pretty uh a good move higher”
“we're having 3% plus PCE inflation. That's what the Fed tracks”
“the economic data is going to be the big driver everything”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Motoshami to talk about what the effect of the Iran war will be on mortgage rates and whether it can make mortgage rates worse. Before we dive in, I want to thank our sponsor, Trust and Will, for making this episode possible.
Logan, welcome back to the podcast. You look very Miami today. Yes, I literally just got off stage and ran up here, Madam President, to make sure that I come on time for you because yes, I'm in Miami.
Uh uh and uh wow, boy, a lot has happened. You know, we're we're kind of talking about in the last spot like what are the variables and you know, we're the Iran situation is is is interesting to me now thinking what happened on Friday to what happened on Sunday night to what happened on Monday. So, this is Monday.
We're talking about it. Oil prices have not probably escalated as high as people thought. But on the bond market and mortgage side, the initial reaction was what people usually think.
Money went into the bond market early on Sunday night trading and then it kept on going higher and higher and higher. We're pretty much flat. But like we wrote in the article, escalation is the key to any of these situations.
And unlike the bombing of the nuclear facilities, there is no talks of ending this anytime soon.
Right? So, because of that, because the 10-year yield got to a yearly low at 392, we saw a a pretty uh a good move higher. Now, mortgage rates went from 5.99% to 612.
So, it's it's nothing too dramatic and the 10-year yield is still near. I mean, it's basically at the levels kind of it was uh uh not that long ago, but going out in the future, if this escalates into a bigger thing and then it just it's going to be part of the marketplace for a while because it wasn't like, hey, by the way, we're done.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- iran war
- mortgage rates
- 10-year yield
- rate sensitivity
- housing market
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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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