Episode summary
Mortgage Rates 8%, 6% or the base case?
HousingWire Daily
· · 20 min · Hosts: Sarah Wheeler, Tracey Velt · Guests: Logan Mohtashami
Summary
Logan Mohtashami says the latest housing tracker still looks consistent with a market that is cooling only modestly, even after mortgage rates moved above 7%. He argues that the holiday-related swings in inventory, pending sales, and new listings mostly washed out, leaving the broader trend intact: demand softens as rates rise, but the data have not yet shown a dramatic breakdown. He also says inventory growth is slowing as the market moves away from record-low levels, while price growth remains muted and close to his earlier forecast.
The bigger debate is what it would take for mortgage rates to reach 8% or fall back to 6%. Logan’s view is that 8% would require a worse conflict, higher oil prices, a 10-year yield near 5.40%, and a firm economy that keeps nominal growth and labor data strong. By contrast, a return to 6% would require authentic economic weakness and a lower-risk backdrop, because policy alone will not get rates there now that the Fed has been hawkish.
His base case is more moderate: if the conflict ends and oil keeps flowing, he expects mortgage rates to settle around 6.50% to 6.75%. He says that would translate to a 10-year yield around 4.46% to 4.48%, and that the rest of the year will depend on how rates, labor data, and geopolitics interact.
Key takeaways
- Logan Mohtashami says housing demand has softened again above 7% mortgage rates, but the tracker still shows only modest aggregate changes.
- He argues that 8% mortgage rates would require a worse conflict, higher oil, and a 10-year yield near 5.40%.
- Mohtashami says a move back to 6% would require real economic weakness, not just a calmer Fed.
- His base case is 6.50% to 6.75% if the conflict ends and oil prices move lower.
- He says inventory growth is slowing as the market moves farther from record-low supply, while home prices remain muted.
Notable quotes
“The theme of the tracker was can mortgage rates get toward 8% or 6%”
“what will it take to get to eight? What will it take to get to six and then what uh what's the base case”
“the economy has to stay firm. Nominal growth still has to stay. The labor market still has to stay”
“If the conflict is over and oil's flowing, we should think about 650 to 6.75 as the base case for rates”
“8% mortgage rates is the same thing we talked about in July”
How the episode opens
Hello everyone. My name is Logan Mohami, lead analyst for Housing Wire. My podcast partner Sarah Wheeler is not with us.
She'll be out a few days as her daughter gets married. We have so much to talk about, especially with rates, what happened with the uh tracker over the weekend. And also, just remember for all the top news in real estate and mortgage, go to housingwire.com where you can read the tracker article where I talk about uh the the subject we'll talk about today, will mortgage rates get to 8% or 6% or the base case that I have.
And we will start right now. The theme of the tracker was can mortgage rates get toward 8% or 6%. And many many uh or actually uh early July we talked about what is the base case now now that the Federal Reserve has gotten hawkish right the hawks won this battle many many months ago and Kevin Walsh finally got on board.
They're hiking rates. you know, the the history of rate hike cycles aren't very good uh for mortgage rates, but this is wasn't a rate cut cycle like we're, you know, cutting into a recession where rates stay lower for a longer period of time. But back in July, I thought, you know, if the conflict gets worse, if something happens with a deal, you know, we get 5% 10-year yield, you know, mortgage rates where the spreads are at 713, 718, I think we're somewhere around there uh uh today.
Um but the question was what will it take to get to eight? What will it take to get to six and then what uh what's the base case but also what happened with the tracker. So we're first going to go with the tracker data.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- housing demand
- mortgage market tracker
- housing inventory
- rate outlook
Watch the episode
Watch “Mortgage Rates 8%, 6% or the base case?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from HousingWire Daily
-
Has housing demand already changed with lower rates? -
How midterms and jobs week will affect rates -
Preparing for Q1 growth in reverse mortgages -
A clear pathway to sub-7% mortgage rates for Thanksgiving? -
Mortgage rates, inflation and those homeowner vacancy numbers -
What did the Fed meeting mean for mortgage rates?
HousingWire Daily, this episode and its artwork belong to HousingWire. Octagon is not affiliated with the show; this page is an independent summary.
