Episode summary
Why home prices are still positive
HousingWire Daily
· · 22 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that home prices are still positive because the housing market is being shaped by lagging national indexes, not by what is happening in real time. He points to FHFA home prices being up 2.6% and Case-Shiller up 1.9% as evidence that the headline numbers are still solid, while his own tracker is meant to lead those measures by three to six months.
He says mortgage rates and the 10-year yield are being driven more by Fed policy, strong nominal growth, low unemployment, and geopolitical and oil-related uncertainty than by any simple oil-price move. He notes that the 10-year yield reached 5.29% and that a 9% mortgage-rate outcome would require a much more extreme combination of higher yields, wider spreads, and sustained economic strength than he sees now.
On home prices, Logan says the market is normalizing rather than collapsing. He argues that price cuts, concessions, and inventory growth are moving toward healthier levels, and that national home prices are unlikely to fall 15% to 20% from here. The bigger picture, he says, is that buyers and sellers are adjusting to a more balanced market after the distortions of 2020-2022.
Key takeaways
- Logan Mohtashami says FHFA home prices up 2.6% and Case-Shiller up 1.9% show the national market is still positive, even if those indexes lag.
- He argues the 10-year yield near 5.29% reflects Fed policy, strong nominal growth, and geopolitical uncertainty more than oil alone.
- Mohtashami says a 9% mortgage-rate scenario would require a much higher 10-year yield, wider mortgage spreads, and persistently strong economic data.
- He believes home prices are cooling, not crashing, and says national declines of 15% to 20% are not his base case.
- Logan says higher inventory, more concessions, and a roughly normal one-third share of homes taking price cuts point to a healthier market.
- He says his tracker is designed to show real-time housing conditions before lagging national price indexes catch up.
Notable quotes
“Our tracker is better in tracking forward and and what's currently happening in the day”
“FHFA home price index is up 2.6%. Quesiller is up 1.9%. Now these are lagging pricing indicators”
“The base case that we had for 8% mortgage rates needs a 540 10-year yield uh and spreads to get worse”
“the pricing curve has gone even uh more negative and that should bring the growth rate of pricing down”
“if people are looking for big national home, you need you need a lot more velocity in the data”
How the episode opens
Welcome everyone. I'm joined today by lead analyst Logan Modosami to talk about mortgage rates and home prices. Before we dive in, here are the top five trending stories on housingwire.com.
First is UWM's Matt Ishbia backs Vantage Score 4.0, followed by news that Rocket Mortgage will make Vantage Score 4.0 know its default credit model. Then we have our 9% mortgage rates possible and from policy to a path forward. Finally, we have PY pushes mortgage insurance cuts.
Lots of good stuff over there. Uh but we want to get into our topic. So Logan, welcome back to the podcast.
It is wonderful to be here and I kind of um one really really smart commodity trader has figured out a little trick I've done over the last 10 years. Uh when the housing doomers get very lippy with me, I always like really push back a week before the queller index because I already know what the Keller index is is going to is going to do. But they don't because they don't read books.
They burn them. And when they talk about these big nominal home prices happening two years ago, one year ago, or now, I already know what it's going to show because we're always three to six months ahead of K Schiller with our tracker. And then all of a sudden we come out this morning and FHFA home price index is up 2.6%.
Quesiller is up 1.9%. Now these are lagging pricing indicators. Our tracker is better in tracking forward and and what's currently happening in the day.
So we're always ahead. But then all of a sudden it's like what happened, you know, what are we doing? So we're going to talk about that today and and kind of explain that a little bit with more details.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- oil pricing
- mortgage rates
- home prices
- credit scoring models
- mortgage insurance cuts
Companies and tickers mentioned
- UWMC
- RKT
- PHM
- TRU
- FNMA
- FMCC
- United Wholesale Mortgage
- Rocket Companies
- PulteGroup
- TransUnion
- Fannie Mae
- Freddie Mac
Watch the episode
Watch “Why home prices are still positive” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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