Episode summary
Will mortgage rates get ahead of oil prices?
HousingWire Daily
· · 17 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that mortgage rates may get ahead of oil prices if bond traders start pricing in an end to the Iran conflict before oil fully cools. He points to a recent divergence: oil stayed above 100 while the 10-year yield fell to around 4.30, suggesting the bond market may be looking past the immediate headlines and not simply signaling recession.
He also pushes back on the idea that a lower 10-year yield automatically means recession. In his view, the labor market is weak in a specific way — low hiring, but also low firing — and that is different from the kind of broad deterioration that defines a true downturn. He says job openings are under 7 million and hires are near 2009 lows, but unemployment is still 4.4% and the economy is still growing.
On stagflation, Logan says the current backdrop is not 1970s-style stagflation because inflation and growth dynamics are different, even with tariffs and war-related volatility. For housing, he expects purchase applications to soften again if rates stay elevated, while noting that demand improves when rates move toward 6.00% and weakens above 6.64%.
Key takeaways
- Logan Mohtashami says the 10-year yield is starting to diverge from oil prices, which could mean mortgage rates move before the conflict headlines do.
- He argues that a lower 10-year yield is not automatically a recession signal, because the labor market is still a “no hire” economy rather than a mass-layoff economy.
- Mohtashami says job openings are under 7 million and hires are near 2009 lows, but unemployment at 4.4% is still far from recessionary levels.
- He rejects a 1970s-style stagflation analogy, saying today’s growth and inflation mix is materially different.
- He expects purchase applications to get hit again if mortgage rates remain above the levels that usually support demand.
Notable quotes
“So, to me, it's that mortgage rates in the bond market will kind of get ahead of this conflict”
“don't automatically assume that the bond market going lower is saying it's going to be a recession”
“Same thing as always. Not a lot of hires, not a lot of fires. You know, it's just the no hire economy”
“I don't like using stagflation because the 70s is different than what it is now”
“when rates were at above 7% and they break under 6.64 and head to six, demand gets better when you get down to six”
How the episode opens
Welcome everyone. I'm joined today by lead analyst Logan Moto Shami to talk about mortgage rates and whether the 10-year yield is getting ahead of oil prices. Before we dive in, I want to thank our sponsor, Total Expert, for making this episode possible. Logan, welcome back to the podcast.
It is wonderful to be here. — It's wonderful to have you here. So much going on. Okay. So, I think the the main thing I wanted to ask you about is the relationship between mortgage rates and oil prices because oil prices have been going up up up and mortgage rates haven't
Last night. Of course, last night WTI, there's two oil things. There's Brent crude and WTI.
WTI is what the White House wants under a 100. They just don't like the headlines of oil prices over 100. though it was perking up higher because uh the Iranians hit a Kuwaiti tanker.
And then like 40 minutes after that, the uh Wall Street Journal or somebody said that Trump has told his aids he just wants to leave. Doesn't care for the straits open, let other countries deal with it. And um oil prices fell from that.
10-year yield fell from that. But what's happened is oil prices are still over a hundred. both WTI and uh and uh uh Brent crude, but the 10-year yield got as low as 430.
So, the 10-year yield from Friday, Monday, Tuesday morning is starting to diverge somewhat against oil prices because oil prices are are are still elevated. So, to me, it's that mortgage rates in the bond market will kind of get ahead of this conflict because a lot of people a lot of people say, "Well, the 10-year yield's going lower. It's a recession.
If I had a penny since 2011 for how many men?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- oil prices
- 10-year yield divergence
- iran war
- mortgage market
Companies and tickers mentioned
- HousingWire
Watch the episode
Watch “Will mortgage rates get ahead of oil prices?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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