Episode summary
Why this was a positive week for housing, but not new construction
HousingWire Daily
· · 18 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that the week was constructive for housing because the 10-year Treasury yield fell, mortgage rates stayed in the sixes, and the market avoided a worse outcome even after hotter-than-expected PCE inflation data. He said the 10-year moving lower after the conflict-related spike in oil and yields matters more than any single report, and that mortgage rates under 6.25% would be workable. He also said the Fed’s earlier guidance still matters: if inflation is not demand-driven, the central bank should not need to get dramatically more hawkish.
On new home sales, Logan said the latest miss and downward revisions reinforced his view that the U.S. cannot simply legislate a construction boom. He argued that new home sales have been stuck in a channel for years, housing starts are still near early-COVID-recession levels, and builders respond to economics, not slogans. In his view, the market for single-family homes remains constrained by affordability and demand, while even apartment development needs the math to work.
He concluded that housing is functioning better than in 2023 through 2025 because price growth is muted, wages are still outpacing home prices, and inventory dynamics are more balanced. The positive week was not about a breakout in construction; it was about rates and inflation not deteriorating further.
Key takeaways
- Logan Mohtashami said the week was positive for housing because the 10-year yield fell and mortgage rates remained below 7%, despite hot PCE inflation.
- He said mortgage rates below 6.25% are workable, while expectations for 5% or 4% mortgages are unrealistic under current Fed policy.
- He argued the new home sales report showed no meaningful construction breakout, with sales still trapped in a multi-year channel.
- Logan said price growth is muted and wages are still outpacing home prices, which makes the market more functional than in 2023-2025.
- He said builders will not overbuild just because policymakers want more supply; they build to demand and profit incentives.
Notable quotes
“it was a good week that the 10-year yield is lower”
“we still have a six handle on mortgage rates”
“I think a lot of people just thought mortgage rates would be lower”
“new home sales have been in a channel”
“People who make money and have families don't live in apartments”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Mohtashami to talk about why this was a positive week for housing despite all that has happened. But first, let me recap the top five trending stories on housingwire.com.
Leading that list is Fannie Mae to expand title pilot program followed by HUD tests a new operation breakthrough for today's housing crisis. Then it's the FHFA pushes GSEs to embrace chattel loans in duty to serve proposal and Logan's why we can't get more housing construction in the US. Finally, we've got our coverage of Trump's decision to delay signing of the 21st Century Act.
So much going on. Okay, Logan, welcome back to the podcast.
It is wonderful to be here. It's been a very interesting week. Um yesterday the 10-year yield had a really really aggressive drop and you know, uh Yes, sometimes you got to explain there's, you know, quarterly rebalancing and sometimes a move might seem a little bit more aggressive to the down or upside and mortgage rates are still not below 6.5%.
So, hopefully the last podcast tried to explain like, you know, how how things had changed, but you know, what as the conflict was going on and whenever we get like these headlines that it's about to end the 10-year yield, first used to come down to 4.24, then it came back down to 4.35 and then, you know, it the bar was kept on being raised with the 10-year yield and it and oil prices and everything. I just want to remind everyone it wasn't that long ago Brent crude was at $126 and the 10-year yield was at 4.68 and mortgage rates were at 6.75, so it could have been worse this week. And this morning the PCE inflation came out and headline is above 4% and core is at 3.4%.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- housing week outlook
- new construction constraints
- mortgage title programs
- chattel loans
- federal housing policy
Companies and tickers mentioned
- FNMA
- PHM
- Fannie Mae
- Pulte
- HUD
- FHFA
Watch the episode
Watch “Why this was a positive week for housing, but not new construction” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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