Episode summary
Warsh talks about Housing, but inflation is the problem
HousingWire Daily
· · Hosts: Sarah Wheeler, Tracey Velt · Guests: Kevin Warsh, Logan Mohtashami
Summary
Logan Mohtashami argued that Kevin Warsh’s first Fed press conference was mildly positive for housing, even though the broader message was still hawkish. Warsh acknowledged that policy looks “uneven” and, for housing specifically, too restrictive, which Mohtashami treated as a clearer acknowledgment than Jerome Powell typically gave. He also said the Fed’s dot plots and forward guidance have outlived their usefulness, and Mohtashami agreed those tools create confusion and should be ended.
The bigger macro point, however, was inflation. Mohtashami said the growth rate of inflation is still too strong, rate cuts are off the table in 2026, and rate hikes are now in play. He tied that to higher oil prices, stronger retail sales, and a labor market that has improved enough to keep the 10-year yield near 4.46% to 4.48%. With mortgage spreads better than in prior years, he said housing is less constrained than it would be at 2023-2025 spread levels.
On housing data, he said pending home sales beat estimates and year-over-year growth was near 5%, while inventory remains healthier than the 2020-2023 period. His view was that stable inventory, cooling price growth, and a still-resilient labor backdrop can keep housing from breaking down even if mortgage rates stay elevated.
Key takeaways
- Mohtashami said Warsh effectively admitted policy is too restrictive for housing, even if it is not for the rest of the economy.
- He expects no rate cuts in 2026 and said rate hikes are now a live possibility because inflation remains too strong.
- He said ending dot plots and forward guidance would be a net positive because they reduce market confusion.
- He pegged a fair 10-year yield around 4.46% to 4.48% after the Fed presser, with mortgage rates likely staying above 6% unless labor weakens.
- He said housing is holding up because inventory is healthier, price growth has cooled, and mortgage spreads are better than in prior years.
Notable quotes
“Kevin Warsh twice kind of hinted that when I look at policy, it's uneven. The housing market, based on the data, policy's too restrictive”
“I've not been a fan of the dot plots. I've not been a fan of, you know, Powell talking too much and people misinterpreting these what what he said”
“All the rate cuts are off the system. Inflation is too strong, and the labor labor market uh improved”
“That is the most interesting aspect of what I saw because of all of you that are listening to this are pretty much uh real estate or mortgage or consumers”
“The Federal Reserve Chairman gave a nod to housing twice. I thought that was interesting”
How the episode opens
Hello everyone. My name is Logan Mohtashami, lead analyst for HousingWire. We have a special event today.
Sarah Wheeler is not with us, so we're going to have some fun. Um we just got off the uh Fed presser uh today. Kevin Warsh's first first uh Fed press meeting.
A lot of interesting to talk about. Just remember with HousingWire, we break all the news daily. Uh if you go to the HousingWire website, you can get the latest updates, especially the pending home sales data that I just wrote about as well.
Not shocking to all of you that have listened to our podcast that pending home sales did beat estimates and showing almost 5% year-over-year growth. But let's get to the big picture. Kevin Warsh's first uh uh Fed event, and a lot of things are going to change.
Uh but we're going to start off by saying for the first time ever, Powell never really did this in the last few years, uh but it was somewhat of a pro kind of housing tip. Like he tipped his hat off when they talked about is monetary policy too tight. Right?
And you know, they mentioned stock markets at you know, highs, GDP still growing, job growth is still there. Uh Kevin Warsh twice kind of hinted that when I look at policy, it's uneven. The housing market, based on the data, policy's too restrictive.
That's kind of how I read it. For everything else, not so much. So the unevenness, that term that he used, uh is similar to what he talked about many, many months ago.
And this is why I always said for for housing specific, Kevin Warsh is much better than Jerome Powell. Uh because he talked about it, well, housing's been in a recession and you know, policies are too restrictive Uh uh in that regard.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- fed rate policy
- inflation
- housing market
- federal reserve chair
Watch the episode
Watch “Warsh talks about Housing, but inflation is the problem” 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.
