Episode summary
Will mortgage rates get back to 7% this year?
HousingWire Daily
· · 19 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Mortgage rates getting back above 7% in 2026 is possible, but Logan Mohtashami argues it would take a lot more than the current geopolitical noise. He says the recent move in rates has been driven more by the 10-year Treasury yield, Fed policy, and better labor data than by the Iran conflict itself. In his view, mortgage spreads have been relatively contained, which is one reason rates have not broken decisively higher even as markets absorbed oil-price and conflict headlines.
Mohtashami says the path to above 7% requires several conditions to persist at once: the Fed staying hawkish, labor data remaining strong, and consumption holding up. He argues that if oil prices ease, or if the Fed softens its language, the pressure on mortgage rates could fade. He also frames the move as a policy story rather than an oil story, saying the Fed is still the main driver of mortgage-rate direction.
He adds that the market would need either a more aggressive hawkish turn or some kind of credit stress for mortgage spreads to widen materially. For now, he sees rates operating inside a range, with a possible move above 7% only if the second-half macro backdrop stays firm and the conflict keeps escalating.
Key takeaways
- Logan Mohtashami says mortgage rates need several conditions to align before they can break above 7%, not just higher oil prices.
- He argues mortgage spreads have stayed relatively stable, limiting the upside in rates despite geopolitical volatility.
- Mohtashami says the Fed remains the main driver of mortgage-rate direction, especially after stronger labor data made policy look less restrictive.
- He expects rates above 7% would require the Fed to stay hawkish, labor data to remain firm, and consumption to hold up.
- He says only a major credit stress event or a more hawkish Fed would likely push mortgage spreads much wider.
Notable quotes
“for mortgage rates to get above 7%, a lot does need to happen”
“The Fed getting more hawkish to me was the reason why we said the base level of mortgage rates now should be 650 to 675”
“Mortgage spreads uh uh have been better”
“the Fed policy because the labor data got better”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Modosami to talk about the chances of mortgage rates getting back to 7% this year. First, let me recap the top five trending stories at housingwire.com.
At the top of that list is Logan's article, why aren't mortgage rates lower? Followed by when AI listings look too real. Then we have mortgage rates rise past 6.75% as inflation in uncertainty persists and our coverage of Kelly Blue Book launching a home valuation platform.
Finally, Logan's article on why it's hard for mortgage rates to get back to 7% which is our topic today. Logan, welcome back to the podcast.
It is wonderful to be here. You know, we kind of broke the rules. We're not supposed to have Iranian conflict during the market week. That's supposed to be for the weekend. What's going on here? — What's going on here? But it does set up the question I want to ask you today, which is given all that's happening, giving a potential reaceleration, maybe oil prices go higher, do you see mortgage rates, do you think they can get above 7%.
So, we wrote this article yesterday kind of outline why why has it been hard to get mortgage rates above 7%. you know, we have rising inflation, we have a better labor market than last year, and we had a Iranian conflict, um, and oil prices got above 100. Now, if I would have said that to any human being on planet Earth in the last three years, every single one, oh, mortgage rates are above 7%.
We go, okay, except mortgage spreads, right? Mortgage spreads uh uh have been better. And also we have to remember Fed policy is actually less restrictive than it was in 2023 when Fed funds rate was over 5%.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- interest rates
- housing market
- inflation uncertainty
- mortgage market outlook
Watch the episode
Watch “Will mortgage rates get back to 7% this year?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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