Episode summary
Unemployment, consumer sentiment and mortgage rates
HousingWire Daily
· · 23 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that the war-related spike in oil prices has put the 10-year yield and mortgage rates in a tug of war. On one side, higher energy costs and an escalating conflict can keep yields elevated if the economy keeps expanding and inflation stays hot. On the other, a weaker labor market and softer growth would push yields lower as the Federal Reserve turns more dovish. He said the market has not yet committed to either path because it does not know whether the economy can absorb the shock.
He tied that uncertainty to housing by saying mortgage rates generally improve when unemployment or jobless claims rise enough to signal labor-market stress. That is the opposite of what many people assume: slower job growth and weaker consumer demand can help housing by pulling rates down. He said the unemployment rate is less useful than jobless claims because the Fed can explain away some unemployment gains through labor-force growth.
Mohtashami also dismissed consumer sentiment as a reliable guide for housing, arguing that mortgage demand and purchase applications matter more. He said housing still functions better at 6.25% and under, and that the recent move from 5.99% to 6.24% has not yet broken demand.
Key takeaways
- Mohtashami said the 10-year yield is in a tug of war between war-driven inflation pressure and a weaker labor market that would force dovish Fed policy.
- He argued that rising unemployment can actually help housing because it tends to push mortgage rates lower.
- He said jobless claims matter more than the unemployment rate because claims are harder for the Fed to explain away and more clearly signal a breaking labor market.
- He said consumer sentiment has been weak for a long time and is less useful than purchase applications and contract data for judging housing demand.
- He said housing still operates better at 6.25% and under, and the recent rate move has not yet changed demand enough to break the market.
Notable quotes
“it's a tugofwar at this stage”
“the unemployment rate going higher, oddly enough, will be better for housing”
“consumer sentiment has been trash for a very long time”
“housing operates better six and a quarter and under”
“it hasn't really impacted because the 10-year yield hasn't gone up enough to change the demand curve”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Motoshami to talk about the 10-year yield and mortgage rates as we look at the unemployment numbers and consumer sentiment even as the war with Iran continues to escalate. Before we dive in, I want to thank our sponsor, Trust and Will, for making this episode possible. Logan, welcome back to the podcast. It is wonderful to be here, Sarah.
It is wonderful to have you. Well, you have had a very eventful 24 hours. Um, tons of stuff going on and uh CNBC called. You're on Fast Money and that was a great segment and then also a hilarious segment.
You know, I I I have to tell you, doing the uh the CNBC show at 2:15 p.m. instead of 2:15 a.m. is a lot more fun. You know, uh — You've done both.
I've done both. Yes. Uh uh so as you can imagine, fast money with all the crazy market drama out there, you know, who are they going to call?
Bring the chart daddy. So I joked with you about it that I know things are hectic when my bond trader friends, stock trader friends, and commodity trader friends are all talking to me on the same day, right? So, everyone's trying to figure figure this out.
Uh uh what's going on and still with the 10-year yield and mortgage rates and everything and and you know, it's it's it's very confusing, but I I I thought that was the best uh CNBC interview uh uh I've been a part of because the questions were really good uh out there.
I thought they were. No, we're going to get to some of those questions, which are some of the things I asked you about.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- unemployment rate
- mortgage rates
- consumer sentiment
- war with iran
- housing market
Companies and tickers mentioned
- HousingWire
Watch the episode
Watch “Unemployment, consumer sentiment and mortgage rates” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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