Episode summary
Mortgage rates, housing demand and inflation week
HousingWire Daily
· · 23 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that mortgage rates, not just home prices, are still the main variable shaping housing demand. He said the latest tracker shows demand holding up, but only barely, with year-over-year housing activity flattening as rates sit above 6.64%. He tied the recent move in the 10-year yield and oil to conflict headlines, saying bond markets are reacting to geopolitical risk and to a more hawkish Federal Reserve backdrop than earlier in the year.
He said mortgage spreads have been the key reason rates have not broken meaningfully above 7%, and that if spreads looked like 2023, 2024 or 2025, mortgage rates would be much higher than they are now. Even so, he expects little immediate improvement in existing home sales and said the market has moved from growth to a slow-down phase. He also pointed to inflation week as important for the Fed, noting that CPI, PPI, jobs and wage data are all feeding into the case for or against a September policy move.
Mohtashami also pushed back on the idea that limiting immigration meaningfully explains national home prices. He said less migration can matter more for rents and vacancy rates in certain markets, but not as a broad national explanation for housing costs, which he argued are driven more by demographics, productivity and inflation dynamics.
Key takeaways
- Logan Mohtashami said housing demand is still holding up, but only barely, as mortgage rates stay above 6.64%.
- He argued mortgage spreads have prevented rates from moving much above 7%, and that 2023-2025 spread conditions kept rates lower than they otherwise would have been.
- Mohtashami said conflict headlines are pushing oil and the 10-year yield higher in tandem, reinforcing a hawkish rate backdrop.
- He said inflation week matters because softer CPI or PPI could make a September Fed move harder to justify.
- He argued that reduced immigration can affect rental demand and vacancies in some markets, but does not explain national home price trends by itself.
Notable quotes
“housing demand is flat year over year. Two of the last three were positive, but just by a smidge”
“the spreads basically have kept rates under seven. This is the first time in many many years that's not been the case”
“the bond traders are are properly accordingly to what the Federal Reserve is telling them”
“less immigration, less migration in Texas and Florida, and then kicking people out. When you kick somebody out, wherever they were living, they're not living anymore”
How the episode opens
Welcome everyone. I'm joined by lead analyst Logan Motashawmi to talk about mortgage rates and housing demand. Before we get started, here are the top five trending stories at housingwire.com.
First, we have the latest tracker, mortgage spreads keeping housing demand intact, followed by a Grand Rapids leads Midwest housing surge as buyers chase affordability. Then we have UWM downgraded by Fitch after Q2 loss, and real estate consolidation wave is coming for proptech. Finally, we have home equity hits 18 trillion as delinquencies and foreclosures rise.
Logan, welcome back to the podcast.
It is wonderful to be here. I I woke up early in the morning and I saw before I see I even saw the 10-year yield, I saw an update of me on this day, August, you know, 2021. And I forgot I used to take these big long summer vacations to these exotic resorts over the years, and I'm going to the California MBA event right after this.
And I had this, you know, fun summer. It was It was Amanara in Turks and Caicos, and the water was beautiful, you know, and I was just like, yeah, can't do those anymore. I got work, you know, so uh uh uh uh
Logan, you never take off now. I mean, it's you're always Even when you were there, you were working, let's be honest. — Though I was there. I just This is how I am. But uh Monday morning, um conflict news. Again, we you know, the the 10-year yield really revolves on conflict headlines, and you know, oil prices and the 10-year yield weren't really doing anything too much, and now we're back and forth on negotiation tactics. It's funny cuz uh Iran was talking about, you know, we might not even deal with Trump at all until the presidency is over.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- housing demand
- inflation
- housing market
Watch the episode
Watch “Mortgage rates, housing demand and inflation week” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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