Episode summary
What will housing data look like when the Iran conflict is over?
HousingWire Daily
· · 26 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that the market has already moved past the worst-case Iran conflict scenario, with the 10-year yield, oil prices, and mortgage-rate spreads all improving as the bond market anticipated a resolution. He said that if the conflict is winding down, the backdrop for housing is still workable because mortgage spreads have been better in 2024, 2025, and 2026, and because the Fed is carrying a lot of rate cuts in the system even if officials stay hawkish.
On inflation, Logan said energy would affect headline readings, but he does not see breakaway inflation unless oil stays elevated for a long time. He pointed to sticky but contained conditions: PCE inflation around 3%, elevated PPI, and a 10-year yield range he sees as consistent with current Fed policy. He also said mortgage rates below 6% are possible, but breaking materially lower would likely require weaker labor data or a more dovish Fed.
The second half of the discussion focused on housing inventory and the White House claim that the U.S. is short 10 million homes. Logan rejected that figure as theatrical and said active inventory, not deficit estimates, is what matters. He argued the market has long operated with roughly 2 million to 2.5 million active listings, that builders are driven by margins, and that the U.S. does not simply build its way out of housing shortages on demand.
Key takeaways
- Logan Mohtashami said the bond market has already priced in a possible resolution to the Iran conflict, helping the 10-year yield and mortgage-rate spreads move in a friendlier direction for housing.
- He argued inflation would stay sticky but not break away unless oil remains elevated for an extended period, even with headline pressure from energy costs.
- Logan said sub-6% mortgage rates are possible, but getting below 5.75% would require either materially weaker labor data or a more dovish Fed.
- He dismissed the White House’s 10 million home shortage estimate as “theatrical,” saying active inventory is the more useful housing metric.
- Logan said the U.S. housing market does not operate like a public-sector construction plan because builders respond to margins, not political targets.
Notable quotes
“the 10-year yield is back to a range that I thought can be workable because of the spreads”
“we have so many hawks on the Federal Reserve that don't want to cut rates”
“you don't necessarily have breakaway inflation unless oil stays elevated for a longer period”
“I don't want anybody in America to fall for the line that we have no homes to buy”
“There is no 10 million short. I don't know they they just randomly threw up a number right”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Motashami to talk about what housing looks like post-war when it comes to inflation, the 10-year yield, mortgage rates. We are excited to be able to talk about this.
Can't wait to dive in. Before that, I want to make sure to say thank you to our sponsor Total Expert for making this episode possible. Logan, welcome back to the podcast.
It is wonderful to be here. It is Friday morning. And you know, the headline just came out that, you know, we might do a $20 billion uranium swap between the US and Iran.
10-year yield fell. We tested at where I left like at the 424 level. That was the first test after the possible ceasefire.
Oil prices made another leg lower. Last time I checked was 84. Who knows what will happen on Monday.
Of course, the weekends are pretty crazy these days. But it's time to start thinking because we are back in the bull. And when we talk about the bull, the 10-year yield, late August, early September, all the way up until the the war started, we were kind of between like 395 on the 10-year and 430, kind of in that area.
Spreads are better, so it's been the lowest mortgage rate curve in the last few years. But the housing data looks a lot better. You know, just, you know, kind of going with the forecast this year, we could get 237,000 more existing home sales if mortgage rates are 6 and a quarter and under less volatility.
And that's kind of like, you know, what I was what we had, which was rare. We we haven't had that. But we just took a shock.
We took a war shock. There were people talking about 8 to 11% mortgage rates and all all these things.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- housing data outlook
- iran conflict
- fed expectations
- 10-year yield
- mortgage rates
Watch the episode
Watch “What will housing data look like when the Iran conflict is over?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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