Episode summary
Will the inflation report change the Fed’s mind on rate hikes?
HousingWire Daily
· · 14 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami said the latest CPI report was tame enough to fit expectations, but probably not strong enough to force a September rate hike unless a few hawkish Fed voters shift. He argued that Beth Hammack, along with Neil Kashkari, Lori Logan, and possibly Austin Goolsbee, are still inclined to hike rates regardless of softer inflation and weaker labor data. In his view, the Fed’s most hawkish members are focused on pushing the cost of debt higher even if the jobs market deteriorates further.
On housing, Logan said existing home sales remain subdued but not alarming. He emphasized that inventory is still only slightly down year over year and that home prices are rising about 2%, which he sees as consistent with a functioning market rather than a distressed one. He also pointed to purchase applications being up week to week, while warning that year-over-year comparisons will get harder as the year goes on.
He tied the bigger housing picture to demand and builder behavior, arguing that homebuilders do not simply produce unlimited supply because policy makers or commentators want more homes. In his view, builders respond to profit signals, and current new-home sales remain around 2019 levels even as they try to move inventory with incentives.
Key takeaways
- Logan Mohtashami said the CPI report was tame, but he still sees Beth Hammack and other hawks favoring a rate hike.
- He argued the Fed is split, and that only a few voters may now be able to support a September hike after softer inflation and jobs data.
- Mohtashami said existing home sales are weak but inventory being slightly down year over year still points to a healthy market.
- He said home prices rising about 2% are not a problem, especially compared with the 5% to 6% growth that would worsen affordability.
- Mohtashami argued builders respond to profit incentives, not political pressure, and that new-home sales are still roughly at 2019 levels.
Notable quotes
“I think it's Beth Hammack and Neil Kashkari and Lori Logan and the smirk of Austin Goolsbee”
“I think for some people having inventory be down year-over-year, you know, we wrote that article just to say hey, this is still a very healthy thing”
“If home prices were at 5 to 6% growth and wage growth is at 3.2 then you know, it's a negative, right”
“They are not the March of Dimes”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Mohtashami to talk about inflation, the Fed, and existing home sales. Before we dive in, here are the top five trending stories on housingwire.com.
The first story is sizing up Google's real estate play at the AI summit, followed by AI agents could dominate home search. Then we have two Harbors calls UWM lawsuit frivolous. And what Better's leadership change could mean for Neo Home Loans and AI.
Finally, mortgage insurers face larger safety net rule for Vantage Score 4.0. Okay, we're ready to go. Logan, welcome to the podcast.
It is wonderful to be here. It is CPI inflation week with conflict week and existing home sales and uh of course the theme of 24 still continues. But uh today we're going to kind of go over the uh big inflation report that the Federal Reserve was hanging a lot of their hats on for a September rate hike uh and also talk about the existing home sales report and inventory being down year-over-year.
It's nice to have something to talk about that's not the Iran conflict. So, let's dive into the inflation report.
So, it's a very interesting setup for this because the irony is you know uh a few weeks ago Christopher Waller came out and said, "A July rate hike is on the table if the inflation data's hot. Like if the CPI's hot, we're going to do it, man. We're going to do it.
We're going to hike rates. So, kind of since that time frame the growth rate of inflation has been tamed. The month-over-month data has been tamed.
The year-over-year is you know, at least on the CPI side is is is is cooling down a little bit. The jobs report has had two soft reports, at least to the headline prints.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- inflation report
- fed rate hikes
- existing home sales
- housing inventory
- mortgage market
Companies and tickers mentioned
- GOOGL
- GOOG
- UWMC
- HouseCanary
- Lower
- UWM
- Two Harbors
- Better
- VantageScore
Watch the episode
Watch “Will the inflation report change the Fed’s mind on rate hikes?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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