Episode summary
Is the national debt pushing mortgage rates higher?
HousingWire Daily
· · 22 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that the recent rise in mortgage rates is not mainly being driven by the national debt, even with headlines fixated on $40 trillion in federal debt. He says the bigger forces are Federal Reserve policy, a labor market that has held up better than expected, inflation that has stayed sticky, and the market’s response to conflict and tariff-related uncertainty. In his view, those factors matter more to the 10-year yield than debt stories do.
He also pushes back hard on the idea that U.S. debt is an immediate economic threat. Mohtashami says politicians have used federal debt as a “boogeyman” for more than 100 years, but the bond market has not behaved as if the United States is on the brink of a funding crisis. He argues that if debt were truly the driver, Treasury yields would be “exploding higher,” and he says he would only worry if bond markets in the U.S. and other major economies began to break down.
On housing, Mohtashami says the U.S. does not have a simple housing shortage story; instead, the market is facing a demand and affordability problem. He says housing starts and permits are falling, rates above 6.64% slow sales, and mortgage spreads have kept rates below 7% for now. Despite the volatility, he says home sales remain positive year to date and inventory growth is helping create a healthier market.
Key takeaways
- Mohtashami says federal debt is not the main reason mortgage rates are higher; Fed policy and conflict headlines matter more.
- He argues the labor market is strong enough under the Fed’s metrics to keep pressure on the 10-year yield.
- He says the bond market has not shown the kind of stress that would signal a real U.S. debt crisis.
- On housing, he says the issue is demand and affordability, not a straightforward national shortage.
- He says mortgage spreads have kept rates under 7%, which has helped home sales stay positive year to date.
Notable quotes
“I don't really talk about like the federal debt being an issue. I look at 65 to 75% of where the 10-year yield can go as Fed policy”
“it's not the Federal debt. It's these issues and the Federal Reserve itself changing policies with the conflict with inflation running and unemployment rates at 4% and nominal growth still elevated”
“I only care about what the bond market is telling me. And if I'm worried about federal debt, then I need to see bond yields actually start to aggressively go higher”
“we are the wealthiest most powerful country and we are not going to be treated worse than Guatemala or Mexico or Canada or Europe in the bond market”
“Reality is if you had a shortage, then housing sales and demand would be rising and then you have to build more homes”
How the episode opens
Welcome everyone. I'm joined by lead analyst Logan Motoshami to talk about whether federal debt is pushing mortgage rates higher. Before we dive in, here are the top five trending articles on housingwire.com.
First is why the 2026 mortgage layoff cycle looks different, followed by Logan's article, this is why the US doesn't have a housing shortage. Then we have why starter homes got harder to build at scale and MLS critics call it anti-competitive. These brokers say it helps them compete.
Finally, we have better rolls out a poison pill as Garg fights for control. Okay, we are ready. Logan, welcome back to the podcast.
Or maybe you should welcome me back since you've done
I know. Twice in one week, Sarah. People are talking. People are talking. They're saying, you know, they're going to give Logan the show all by himself so he can do it twice a day, seven days a week. — Well, you're not getting rid of me that fast, but I do appreciate you jumping in. That was really great yesterday. And I I really enjoyed the episode. So, let's get to today's topic because wow, it is all over mainstream press. I know people are talking so much about this $40 trillion debt. So, let's get to it.
So, let's just take the last two years. And last year in 2025, nobody had mortgage rates going lower. They had it going higher because of the, you know, 36 trillion in debt.
Uh there was a summer camp group of men influencers mostly tied to the White House that were that were touting that we needed to create a recession so we can refinance all this debt. We had 10 trillion dollars of of debt that uh supply was going to hit.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- national debt
- mortgage rates
- housing market
- mortgage industry
- rates outlook
Watch the episode
Watch “Is the national debt pushing mortgage rates higher?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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