Episode summary
Mortgage Spreads: the key for housing in 2026, 2027 & 2028
HousingWire Daily
· · 19 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that mortgage spreads, more than the Fed alone, are now the key variable for housing through 2026, 2027 and 2028. He said the recent bond-market volatility was driven by a mix of stronger economic data, a hawkish Fed, and Middle East conflict headlines that pushed oil and the 10-year yield higher.
His main point was that housing can tolerate high rates better when spreads are contained, but if spreads widen again, mortgage rates become much harder to pull back toward the low sevens or below. He pointed to 2023 as the cautionary example, when spreads were at extreme levels and mortgage rates would have been even higher without that spread support.
Mohtashami also said the market is not likely to see rates below 5.75% under the current policy and macro setup. He expects housing to keep reacting to headlines until there is either a de-escalation in the conflict or a meaningful change in the bond market, while warning listeners not to assume political promises or policy talk will become actual housing relief without legislation.
Key takeaways
- Logan Mohtashami said mortgage spreads are the main reason mortgage rates are not even higher, and they matter most for housing over the next two years.
- He argued that if spreads worsen, it becomes much harder to get mortgage rates back to the low sevens, even if Treasury yields move lower.
- Mohtashami said the recent bond-market spike was driven by strong economic data, a hawkish Fed, and conflict-related oil headlines.
- He warned that talk about tax or housing policy changes should not be treated as real relief unless it becomes law.
- Mohtashami said rates below 5.75% are not realistic under the current mix of Fed policy, growth, and market conditions.
Notable quotes
“Mortgage spreads are the only thing that's are preventing rates from being higher, you know, in 2023”
“if mortgage spreads were as bad as they were, it would be so difficult just to get rates back down to 7 and a quarter”
“the spreads cannot get worse. Because if the spreads get worse, then it's going to be harder just to get to the low sevens”
“Because if you could just get toward 6 and 1/2 and 6.75, right? And we just always have to have the mindset that mortgage rates getting below 5.75% just does not happen with Fed policy here”
How the episode opens
Hello everyone. Wow, wow, wow. What a crazy week.
We're doing this on Friday morning. Um and that was one of the more crazy weeks we've had in the bond market. And the irony is the Saturday before when we wrote the tracker, we the the question was and we did a podcast on this about like, what does it take to get six?
What does it take to get eight? And what is the base case? And the premise for 8% rates um was number one, the conflict gets worse especially with the Houthis.
Uh we saw that uh uh last week where the Houthis bombed bases and tried to go for pipelines and everything. So, the conflict has to get worse. A, we had that.
Um uh B, the economic data had to be firm and good and the economic data was firm and good and we're still growing as a as an economy and jobless claims are under 200,000 and and the uh PMI manufacturing and the service sector, all these things are are are are are positive lately. So, that's number two. Uh and also, you know, the Fed has to stay hawkish.
The Fed cannot come out and try to talk down the bond market. You know, kind of what they did in 2023 and 2024. They have to stay hawkish and Barr uh stayed hawkish uh and he knows a voting member.
And like we've uh uh talked about in the article, you know, um majority of the moves higher in the 10-year yield after August of 2020 comes from three days around payrolls and or Fed speeches or talking points. Either it's Powell or the Vice Chair Waller and now Barr is in there. So, we saw the volatility really take off especially intraday where one Houthis headline, oil prices up, 10-year yields up.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage spreads
- housing market 2026-2028
- mortgage rates
- mortgage industry
Watch the episode
Watch “Mortgage Spreads: the key for housing in 2026, 2027 & 2028” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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