Episode summary
Logan Mohtashami on the economics of war and its effect on housing
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that housing is now being pulled around by a war-driven headline market, with oil prices and the 10-year Treasury yield moving together as news from the conflict changes sentiment minute by minute. He says the result is “chaotic wartime economics,” where the priority is less about getting oil back to old lows and more about preventing further escalation that would keep input costs and inflation elevated.
On housing, he says the first signs of softness are showing up in forward-looking data. Purchase applications had been holding up, but he says both week-to-week and year-over-year growth have now slowed, reflecting higher mortgage-rate volatility. He had already expected 2026 mortgage rates to average lower than prior forecasts, but he says the conflict has made it harder for rates to move down meaningfully, especially with inflation still above target.
Mohtashami does not think the Federal Reserve will cut rates while the shock persists. He says the war is inflationary first, and only later potentially recessionary if it causes real demand destruction. For now, he says the housing market still has a decent setup relative to recent years, but that spring demand could be damaged if volatility lingers and the bond market keeps reacting to every headline.
Key takeaways
- Logan Mohtashami says oil headlines are moving the 10-year yield and mortgage rates together, creating “chaotic wartime economics.”
- He says 2026 mortgage-rate forecasts were already trimmed, with his peak estimate now 6.75% instead of 7.25%.
- Mohtashami says purchase application growth has turned softer, with week-to-week data negative and year-over-year growth down to about 5%.
- He argues the Fed will not talk about rate cuts while inflation is above target and the war is still creating a supply shock.
- He says the bigger housing risk is not a return to 7%+ mortgage rates, but prolonged volatility during the spring buying season.
Notable quotes
“So we're in this kind of market and this is chaotic wartime economics out here. Um it's fluctuating and this is always the concern”
“So for the first time um to me you could see the higher rate impact even though purchase application data was positive year-over-year”
“so of course any headlines that there's something positive, you know, things get better”
“There is no rate cuts at all while this goes on. There will not be a rate cut”
“less volatility is a good thing and we had that early this year”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Moto Shami to talk about wartime economics in the middle of this crazy time. Before we get started, I want to thank our sponsor, Trust and Will, for making this episode possible. Logan, welcome back to the podcast. Another in person because we are uh still at the New Jersey Mortgage Bankers Association conference. We're leaving today, but here we are in the lobby.
Why am I still a guest? — Why Why don't you say it's like true? It's been going on for a while. So, everyone gives Sarah grief for that. I feel like, you know, I'm I'm being entered into a room every day, you know. Oh my gosh. It's different.
No, you see you see what he's always like. Okay, we have a lot to talk about today. I think the craziest thing is that the headlines, literally headlines, can move the market up and down within a day quite a bit. We saw this yesterday. We're seeing it already this morning. What to take away from that as far as mortgage rates?
So, uh it's really simple. You look at the 10-year yield chart, look at oil charts, they're moving uh um in tandem to a degree. Uh so of course any headlines that there's something positive, you know, things get better.
Uh it's Wednesday morning. Uh the 10ear yield was at 432. Oil price was down and then Iran brought a headline out saying that the uh uh uh ceasefire is not acceptable.
Tenure yield went up. Oil prices went up. So we're in this kind of market and this is chaotic wartime economics out here.
Um it's fluctuating and this is always the concern. I mean, the trade war tap dance is one thing, but when you have the trade war tap dance and you're doing tariffs back and forth and you're threatening to do this, you know, you can taco your way out of that,
Right?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- oil prices
- mortgage rates
- treasury yields
- housing economics
- geopolitical war
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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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