Episode summary
Jobs data, mortgage rates and housing demand
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that the labor market is still stabilizing, not breaking, and that the Federal Reserve likely has little reason to cut rates unless jobless claims deteriorate sharply. He said the bar for acceptable job growth is now much lower than in past cycles, with 30,000-plus monthly payroll gains still likely fine for the Fed, especially while inflation remains above target and oil-driven volatility keeps policymakers cautious.
He also said the recent conflict in Iran has muddied the outlook for both inflation and rates, pushing 10-year yields and mortgage rates around from week to week. In his view, the bond market is reacting more to headlines than fundamentals right now, and that makes it harder to separate labor data from inflation pressure.
On housing demand, Mohtashami said purchase applications were down 3% week to week but up 5% year over year, while Redfin’s forward-looking demand data and pending home sales remained at multi-year highs. He argued that demand has held up better than many expected even with mortgage rates above 6.5%, helped by improving affordability as inventory rises and wage growth outpaces home-price growth.
Key takeaways
- Mohtashami said the Fed can probably live with monthly payroll growth above 30,000 as long as jobless claims stay near current levels.
- He argued that oil prices alone are not enough to trigger a recession unless credit markets also break down.
- He said the conflict in Iran has made the Fed less likely to cut and has added volatility to mortgage rates and the 10-year yield.
- Mohtashami said purchase applications fell 3% week over week but were still 5% higher than a year ago.
- He said housing demand is holding up better than expected because inventory is up and wages are improving affordability.
- He expects clearer signs of housing strength only if mortgage rates can stay near 6% rather than spike higher.
Notable quotes
“the labor market is stabilizing and like ADP came out. We don't really put too much weight in ADP”
“I don't believe we're going to see any of that data currently”
“purchase application data down 3% week to week, but up 5% year over year”
“So far, that's not been the case”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Moshami to talk about jobs data and housing demand. Before we dive in, 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. We missed the day because we couldn't get internet in the hotel room and you know, I had to get on stage and I had like 15 minutes to get on stage and my bag broke and my Listerine bottle went all over my clothes and I had to hand wash my clothes air dry with I was so much drama, you know, between 8:45
For a for a podcast in the middle of all that. We tried that and it just was too crazy. — But we're here and it's jobs Friday. Um by the time this podcast comes out most people, you know, we've already got the report. So, what do we think now? I mean, last year was so paper rock scissors labor over inflation. Bond yields are going to go lower and everything, but the the structural dynamics have shifted now because of the conflict in Iran and uh uh but what do we think about jobs?
This is my first question to you because um so we already you've said several times, right? Like even if we come up with like 30,000 jobs created, the Fed would be like, "Oh yeah, that's fine. But I mean, it looks like maybe we won't even do that if you think about, you know, some of the pressure on the economy with the oil prices.
Do you do you expect that kind of thing to have had any any effect yet on job created or job loss? So, it's probably a little bit too early for the oil uh uh impact.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- jobs data
- mortgage rates
- housing demand
- global volatility
- 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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