Episode summary
Logan Mohtashami: It’s no longer labor over inflation
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that the market has moved from a labor-led disinflation story to one dominated by inflation risks, especially as energy prices and conflict keep pressure on the economy. He says the labor market is no longer weak enough to justify the old “labor over inflation” framework, citing firmer jobs data, job openings, and ADP gains. In his view, that shift means the Federal Reserve is not positioned to cut rates soon, and the market has already priced out cuts and in a possible hike.
On housing, Mohtashami says demand has been more resilient than many expected. He points to purchase applications, weekly pending sales, and affordability improvements as evidence that buyers are still active even with higher rates and volatile headlines. He argues that millions of people buy homes every year and rejects the idea of a broad mortgage-rate lockdown.
He also says rental vacancies are elevated while homeownership vacancies remain near 1%, reflecting the aftereffects of the multifamily construction boom. That backdrop, he says, supports rental disinflation and helps explain why housing remains healthy even if it is not booming.
Key takeaways
- Mohtashami says it is “no longer labor over inflation” because the labor market has improved enough that inflation is again the bigger risk to mortgage rates.
- He says the bond market has priced out rate cuts and now sees a hike because inflation growth is rising while energy prices stay elevated.
- He argues housing demand has held up well, with purchase applications and pending sales still showing resilience despite higher rates and conflict.
- He says rental vacancies are above 7% while homeownership vacancies are near 1%, which he sees as evidence of a healthy but uneven housing market.
- He thinks affordability, not a mortgage-rate lockdown, is the key constraint on housing demand, and lower rates would mainly improve activity at the margin.
Notable quotes
“It's no longer labor over inflation and and there was a reason why”
“the labor market isn't breaking, inflation is not a target. So, we're not, you know, everything is changing”
“I don't believe in a mortgage rate lockdown. If I thought a mortgage rate lockdown was real, boy, I would see it in existing home sales”
“rental vacancies are up. There's disinflation and deflation in rents”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Mohtashami to talk about labor and inflation and how his calculus of those two elements has changed when it comes to mortgage rates. We're also going to talk about housing demand.
But before we dive in, here are the top five trending stories on housingwire.com. Logan's story on labor over inflation is in the top spot, followed by one titled The Housing Markets That Missed the Pandemic Boom Are Quietly Outperforming. Next is the latest tracker on why inventory just turned negative, followed by Why CoStar Berkshire Hathaway Are Betting Big on Home Building.
Rounding it out, we've got coverage from the IMN conference on Pulte's new role with Sam Valverde, Pulte's D&I role won't sideline GSE reform. Logan, welcome back to the podcast.
It is wonderful to be here. Again, another crazy week we're dealing with this, but at least the the market responses are a little bit less volatile, even though like we've had two nights of missiles and bases attacked and this and that and um clearly you could see President Trump really wants this to kind of end. Uh even so much about making sure the public knew that he ripped into Netanyahu, but uh we are here today.
It's Wednesday morning. The 10-year yield is at like 4.48, 4.49, but now we've had two pieces of jobs data in jobs week and we wrote that article. It's no longer labor over inflation and and there was a reason why.
Okay, this is huge. So, you are the labor over inflation guy. You have a you have a mug that says labor over inflation. People have given you merch that says labor over inflation. So, tell us why that's changed.
So, you know, toward the end of last year, you and I did a podcast like outlining like, you know, some positive things that could happen in 2026 that that doesn't happen in 2025.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- labor vs inflation
- housing demand
- housing inventory
- gse reform
Watch the episode
Watch “Logan Mohtashami: It’s no longer labor over inflation” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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