- 6 months ago
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about jobs week, Fed rate cuts, mortgage rates and purchase apps.
Related to this episode:
Fed Vice Chair Michelle Bowman supports July interest rate cut | HousingWire
https://www.housingwire.com/articles/fed-vice-chair-michelle-bowman-supports-july-interest-rate-cut/
HousingWire | YouTube
More info about HousingWire
The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate stories. Hosted and produced by the HousingWire Content Studio.
Related to this episode:
Fed Vice Chair Michelle Bowman supports July interest rate cut | HousingWire
https://www.housingwire.com/articles/fed-vice-chair-michelle-bowman-supports-july-interest-rate-cut/
HousingWire | YouTube
More info about HousingWire
The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate stories. Hosted and produced by the HousingWire Content Studio.
Category
🗞
NewsTranscript
00:00Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about Jobs
00:11Week, mortgage rates, and purchase apps. Logan, welcome back to the podcast.
00:17Sarah, do you know what Donald Trump did?
00:19Ah, that is too broad of a statement. No, you're going to have to narrow it down.
00:23President Donald Trump, who a lot of people think I'm working with because of the whole
00:27shadow Fed, you know, bank thing or Fed President and sharing the articles and everything.
00:36I got all these messages that Trump is taking my marketing line. I was like,
00:41what are you talking about? And then I go and I see Trump is selling daddy shirts.
00:46Oh, no.
00:47And I was like, what? So I totally get why people might think we're working together. We're not.
00:53But, you know, we're not working together. In any case, there's only one chart daddy. There's only
01:00one chart daddy hair, and there's never going to be another chart daddy. So no, he's not stealing
01:05my mark. He just has a selling a t-shirt. By the way, why aren't we not selling chart daddy t-shirts,
01:11hats, wristbands, headbands, you know, get the old 1980s basketball outfits on.
01:19So that's what we should be doing.
01:21We need sweatbands to say chart daddy. I haven't even thought about sweatbands.
01:24Absolutely. 100%.
01:25For when we play pickleball. That's what we need.
01:28We don't play pickleball. I don't play pickleball. I'd rather die before I play pickleball. I play
01:33basketball. When we play pickleball, no.
01:36Oh, my gosh. Okay. Well, we have a lot to talk about. Top of that list, because this is going to
01:43be airing on the week of July 4th is it's jobs week. That is crazy that it came around so fast.
01:50Yes, it's jobs week. And it's a little bit more important jobs week because the Fed is going to
01:55meet at the end of July. Of course, there's no jobs Friday because it's July the 4th. So we're going to
02:01get a ton of data here. And, you know, it's interesting. Friday morning, Neil Kashkari,
02:09our favorite, Neil. Yes. He came out and said, you know, I'm up for two rate cuts. And I just want
02:17to remind everyone, if there were no tariffs at all, they were only going to do two rate cuts.
02:23Right. But he said, I'll do two rate cuts. But if I cut rates in September and then all of a sudden
02:29inflation picks up, we might not cut anymore. So there are lines that are going to be drawn on this
02:36from, let's say, Waller and Bowman to Neil Kashkari and others. But he had an interesting
02:43statement. And we've talked about this before in other podcasts. Like, why hasn't the tariffs hit
02:50the inflation data? And we said, you know, LoganMotoshami.com selling T-shirts from China.
02:55I got a bunch of them already. I don't need to raise the cost yet. But what Kashkari talked about is
03:02that he said that they've talked to companies and they said, for now, their inventory is okay.
03:07And they don't really want to raise the prices to get customers mad, you know, and they're hoping
03:13for trade deals to happen. So when you hear Fed presidents, and it's not just one or two, it's a
03:20few of them saying, well, you know, if more trade deals are done, we can get more dovish. And I thought
03:27that was a good framework of, you know, listen, we're, we're, we can hold out, we're holding out
03:33for trade deals and stuff like that. Then at least there's a little bit of more clarity, but you could
03:38clearly see that the Fed probably wants to be a little bit more dovish, but they need a little bit
03:45more clear, you know, kind of, kind of a better idea of where we're going with this tariffs. And I say
03:52that today because, uh, the July 9th deadline has been moved on to September. So the gold post has
04:00been moved. Right. And, uh, so we're, we're not sure yet. And this is, you know, the by-product of
04:05Godzilla tariffs and taking them away and giving deadlines and everything. But now we look like
04:09we've moved, uh, uh, some of the back out there. So it's, it's an ongoing process. It's not like a,
04:16such a sharp defined, uh, thing, but for, for Kashkari to basically say, yeah, we've been talking
04:23to people. And like we've talked about the Fed is going to use a lot of phone calls to talk to
04:28businesses to see what's going on. And the fact that businesses say, we don't really want to raise
04:33prices. We don't have to yet. And we're hoping that trade deals gives you an idea of what the Fed
04:39might be thinking about on the inflation side, but as always paper, rock, scissors, the labor data
04:46matters more, uh, than inflation. And we're saying we're, we're here Friday morning. We're not that far
04:53from the year to date lows on mortgage rates, uh, as the 10 year yield is, I think the last time I saw
04:58it was 424, 425, uh, spreads are better this year than they were the last two years. So mortgage rates
05:06heading, uh, closer to, uh, six and a half percent, uh, 6.70% around there. So that's kind of around
05:14the year to date lows, but with jobs week, if these data lines get weaker, that's the only report now
05:23before the Fed meets. Uh, uh, and I still don't believe, uh, they'll cut rates in July unless jobless
05:31claims data start to get weaker, but you know, today, personal consumption, uh, data, the, the
05:37spending was lower. The incomes were lower just because of social security payments one, one time
05:42only, but, uh, it becomes a more important jobs week because of the timing of the next Fed meeting.
05:48So, you know, we had Bowman talk about July rate cuts, and then we now have Kashkari saying September.
05:54Do you feel like, I mean, is there, is it September because of when we're going to see, uh, because of
06:01the new deadline for trade deals, or you think it's just those two things are not related?
06:05I mean, I, I, I would always go in the camp that they won't cut in July unless the labor market is
06:10really starting to get weaker for them. And when, and we always, there's, there's so many different
06:16views on the job markets. A lot of people show me the continuing claims chart and continuing
06:21claims are at a three year high, but historically they need to be a lot weaker, uh, before you get
06:28into the recessionary camp. And it's just, it's not me saying this. I I've always stressed this
06:33looking at how the Fed reacts to labor data. They need the labor market to break, to get really
06:38dovish. So continuing claims at a three year high would warrant. When are we getting to neutral? Why
06:44aren't we in neutral now? But it doesn't get them to kind of pivot to maybe a more, uh, uh, in a
06:51economy stance. But again, we're already near year to date lows. If we have a week of softer economic
06:58data, what does this remind us of last year, last year when the hoarder line was broken, it was three
07:05of the four jobs report was weaker than anticipated. Uh, and because of that, the 10 year yield really
07:11pushed bond yields much lower than what the mark, where the Fed wanted to see. And then the Fed cut
07:16rates half a percent and the, the, all the other data lines started to improve. So yields naturally
07:21and should have gone up, but we're below four 35. So what happened? Feds, you got a lot more dovish
07:27Fed talk. You have a shadow Fed president, uh, in play, but now we have the labor data and that to me
07:34matters more. So next week, because of the timing of the Fed is, it's going to be key jobless claims,
07:39ADP jobs Thursday report. Uh, if we keep on seeing softer data, it gets harder and harder for them
07:48not to get to neutral policy faster. That's the key. I think that's, that is a legitimate discussion.
07:55Everyone should be having. Why aren't we at neutral policy yet? Uh, uh, if the labor data is getting
08:01softer, if you're telling American citizens, I know it's hard to find a job, but tough, you're not
08:07breaking it, you know? So I, I love that discussion because Nick Tamera is of the wall street journal
08:12agreed with me on that. And that's why he asked that question as well to the next big meeting.
08:17That's going to be the, the, the, the key on that. So a big week coming up on the labor side.
08:23Wild to think that we could have a replay or some sort of a replay of last year, because again,
08:30if we see weakness, then the bond market will react rates will go down. And then if the Fed does
08:37something in September, rates could actually go up based on them reducing the Fed funds rate. Like
08:42this is crazy. It is true where the Fed funds rate is now the 10 year yield looks normal, maybe
08:49slightly, uh, uh, uh, pricing in more weakness. Um, the closer you get to three and a half percent,
08:56the easier it is to get towards 6% and stay there for a little bit longer. So we're getting into that
09:03nitty gritty period of time where, uh, uh, because they've already cut 1%, where are we going to
09:10neutral? How, how are we going to get there? And, uh, again, what's always moved mortgage rates is
09:17weaker labor data or economic data or perceived slowdown in the economy. It's happened in,
09:23you know, late 2022, early 2023, 2024. Uh, when Godzilla tariffs came in,
09:30the 10 year yield was below 4% because people thought we're going to recession. I didn't agree
09:34with that, but now that we're below 435 on the 10 year yield, now we've got jobs Friday. Now we've
09:40got the shadow fed. Now we've got Waller and Bowman. It's a little bit of a different ball game now.
09:46So that's why the labor data, uh, uh, is key. This is probably not a week where the Fed can
09:52like, you know, handle a really weak jobs, uh, uh, jobs Thursday report or, or, or multiple data lines
10:00because of all the visual. Remember we, we, we, we think of what the white house is doing is a high
10:06school basketball coach working a ref and then telling the ref that guy's holding my guy. He
10:11can't, you know, he's got an advantage over my player. And all of a sudden, if we have a bad week
10:17of labor, Oh my God, they're all going to be yelling at him. And then remember they are human beings
10:22and human beings will start to feel the pressure, right? And that's what happened last year. Uh,
10:26Powell admitted it. Hey, listen, we waited too long to cut rates. Logan was right.
10:31We are going to wait to as last as possible. And then we're going to have to do it because
10:35the labor data forces us to do it. And that's what occurred. The labor data was getting weaker
10:39than they thought. So they went ahead with a 50 basis point cut. And then all of a sudden it
10:43stopped getting weaker and they're like, okay, okay, hold, hold, hold, hold, hold, wait, wait, wait. Oh,
10:48there it is. The bad report. Okay. Okay. Let's go back. So it's kind of that back
10:52and forth thing, or as the Cleveland fed president said, hammock, we're going to wait
10:56to play catch up. And then when you see the bad data, then we'll go, you know? So
10:59okay. The world we live in, the world we live in, Sarah.
11:03Powell did not actually say Logan was right. He just, he.
11:07Listen, if there's only one person that's done the labor over inflation thing since 2022. So I,
11:13I, I, I'm, I'm, I'm taking my luxury, uh, leeway on, on some of these.
11:18Yes. I will give you that. You deserve it because you have been labor over inflation
11:23this whole time. So you deserve that. Give you that. But, um, so interesting. I, I think,
11:29you know, we talk on the weekends when things happen and I was so surprised that nothing,
11:33we didn't see more things happening in the bond market last weekend. Okay. A couple of weekends
11:39ago now, when this, when this airs, when we, uh, bombed three nuclear sites, like if that doesn't
11:45move the bond market, like the only thing that will is the labor data.
11:49Yeah. Things have calmed down. Of course, I think geopolitical trading has become more
11:53prolific and efficient. And you kind of know that Iran has given us clues that they don't
11:58really want to extend this into a bigger war. So, uh, or oil prices, as soon as they got one
12:03good headline, just, uh, tanked lower as it should have. Um, you know, when we think about this
12:10weekend, who knows, who knows what will come out? I, the inflation data report came out today,
12:15the personal consumption and picked up a little smidge, a little hotter than estimates. But again,
12:21we are still here, you know, uh, where the pre pre Christmas egg spike, uh, Jerome Powell would
12:31have had rates lower, uh, than what they are right now, but it's a little bit different. And we still
12:36up two handles. We've had two handles on the PC data for, for a very long time now, but it does
12:42not matter because they want to wait. And even if there weren't any tariffs, they would have waited.
12:47So I think it gets, it gets, uh, uh, maybe this will be a drama free weekend, but it doesn't really
12:55matter because we're going to have to be on four times a week soon. And then we'll, we're always here
12:59on Mondays and we'll go over everything. But, uh, I, I just think we're the second half of 2025.
13:05There's so many things that are up in the air that it just makes, get the popcorn out,
13:10get the Cheetos out, you know, uh, it's going to get really interesting.
13:15Uh, it is already interesting. And I think we just jinxed it by saying maybe this weekend,
13:20nothing will happen. Cause I think we said that last weekend, right before all that craziness happened.
13:24Yeah. I mean, it's, uh, the, the world is different with how information gets disseminated.
13:30And, uh, uh, I mean, think about 20 years ago, can I show people live oil charts on my Instagram
13:36stories and show what the bond market's doing, you know, after we bombed, you know, three, uh,
13:41nuclear facility sites of Iran? No. Uh, so, but again, we're here to keep everyone versed and,
13:47uh, where we are right now with the 10 year yield and mortgage rates, you know, uh, it it's pricing
13:53in maybe a softer jobs week. We'll see. But if that occurs, it'll be really interesting to see if the,
13:59how the 10 year yield reacts now, uh, and then going out in the future, uh, uh, what happens
14:06in that July fed meeting, because it doesn't necessarily mean if there is no rate cut, it's
14:12not necessarily a bad thing. It's the language that happens. And again, we have weekly jobless
14:18claims data that becomes a little bit more prolific as the cycle gets older. So, uh, things to keep an
14:24eye on. And, you know, yesterday the headline job was claims was down a little bit, but the
14:29continuing, the continuing claims is starting to pick up some speed. There's some seasonality
14:34into it, but this is, this is starting to get a little bit more noticeable out there for the Fed.
14:39And again, my thing is that not, not what Trump wants, like two and a half percent rate cuts right
14:44away, but where, where, when do we get to new what, how bad does the labor data need to be for the
14:49Fed to go to neutral policy and stay there and then see what happens with the economy? That I think is
14:54the legit, that's the more sophisticated debate that people should be having with every single
14:59Fed president out there. Okay. Speaking of a sophisticated debate on yesterday's podcast,
15:05you had like one minute to talk about purchase apps, but I want to give you the opportunity to
15:10talk a little bit more about that because what is it? 21 weeks. Is it 21?
15:14You know, we've been, we've been pushing that storyline so much because, you know, a lot of
15:21people are like, well, housing's completely rolling over, sales are crashing. And then I show the purchase
15:25application data and something that nobody tracks. I mean, I mean, nobody, I cannot find a single soul
15:32that's been counting the year to date. And they're just shocked. I mean, everyone is just shocked that,
15:39you know, we have 21 straight weeks of year over year growth, eight straight weeks of double
15:44digit year overgrowth. The new home sales purchase apps at a post COVID high two months ago. But
15:49again, I just always like to emphasize rates went lower this year, not higher. And the new listings
15:55data is up. So whenever you working from extreme low percentages, be a little bit mindful of that
16:00percentage increase that first move higher. But you know, for the tracker data, by the time this comes
16:05out, I want to see, does the pending home sales data start to perk up a little bit more now that
16:11we've had eight straight weeks of double digit year over growth. And to me, it's like, if you have
16:14something material, you got double digit year over year growth. So the pending home sales data that
16:20came out positive year over year. And again, we've been highlighting guys, we're going to have really
16:25low bars on the year over year day. So if you see year over year growth, don't be surprised. We've
16:30been trying to highlight this for the next five months. Sales can be flat for five months in a row,
16:37and we'll have positive year over year data. So the tracker has showed year over year growth now for
16:42some time. But I want to see, do we get any more kick? The closer we get down to 6%, do we get any
16:49more kick? Because that's what's the data shown us in the past is rates between 6% and 6.64 is when
16:55the housing data gets better. So we're slowly creeping our way down there. And the spreads, man,
17:03it's all, if the spreads hadn't improved from 2023, we'd have a totally different conversation. But
17:08that's not the case this year. I think this conversation is so striking, because on a regular
17:15basis, even just yesterday, I saw on the major news site, they were like, you know, housing has had the
17:21worst year ever. It's crashing, it's terrible. And who is their source? Melody Wright. And I was like,
17:27you know, and that's fine, Melody, fine person. But like, there are people who this is their job,
17:34their job is to talk about how housing is crashing all the time. And, and there's definitely outlets
17:40who are like, let's, let's revisit that. And so this is the data that I like us to talk about.
17:44Because if it indeed was crashing, you, Logan Motoshami, you're not a forever anything, you would be like,
17:51listen, this is a concerning sign. But when it's just when it's, you know, positive year over year data,
17:56when we're holding steady, there's no sign of that.
18:00So I recently had a debate with someone, bless that man soul, he came on with spaces to me,
18:07and he kind of said, I think, I think existing home sales are crashing. And I think it could go
18:12down to 3 million and possibly, you know, 2.7 million. And I sat there and I go, this guy's
18:17no idea what he's talking about. He just doesn't, he, you could always tell the experienced people
18:23who track data versus the people who just yap off. And I kind of told him, I said, we've never ever had
18:30data ever in history, where the forward looking datas are positive, and sales crashing. And the
18:37reason I say this is that remember, November 9, 2022, we said, if rates fall down, and the forward
18:45looking data gets better, everyone's going to miss it for six months, because they're going to be
18:49hope, they're going to be working off old data, and they're going to say home sales are crashing and
18:53getting worse. So here we are again, this is actually the fourth time this has actually happened
18:58in the last few years. Our pending contracts are slightly positive. The purchase application data
19:03is slightly positive year over year. That hasn't occurred in a while, both those two together.
19:09If sales were really collapsing, we would see it in both. And then we see it in both,
19:14you tie it to the existing home sales going back to the early 1990s. Back when I had blonde hair,
19:20shaved head, sideburns, whatever. But here, it's holding up, and it's actually growing on a year
19:27of year basis. I think what is always the case is, everyone overweights prices more than anything.
19:35And when they want to do doom porn, home sales are crashing, they always said prices follow volume.
19:40That was all, it's so funny, because the whole housing crash crew, by the way, I have all your
19:45forecasts, you guys are all terrible. You guys had this whole prices fall of volumes, and a lot of
19:52people are down, I've got 19 to 22 to 62 to 42% home price decline forecast, and none of that's here.
20:01Because these are not serious people. Serious people show you models and tracking sites,
20:06and like our tracker, we show this to everyone. If it is negative, it is negative. You can't hide it.
20:12But that's not happening right now. So the supply is growing, right? But in terms of home sales
20:19crash, no, it's just not the case. And it really does confuse anyone, because so many people listen
20:24to the headlines, and they actually have never seen the purchase application data chart. And they sit
20:28there, they go, this can't be true. I was, yeah, it is true. Who do you listen to? Oh,
20:33you listen to Doobers. You eat too much salty food. You need to exercise, drink more water and sleep
20:39more. Okay, you don't know all of that. You don't know all of that. Oh, Sarah Wheeler, trust me.
20:45Men, loser guys all behave the same way. And there's a lot of things they do similar. So
20:50it's not shocking to me. Oh, the person, yeah, the person even said, I do all those things. But
20:56I'm surprised. I said, yeah, because this is what the data is. How many people actually provide you a live
21:02database tracker for the entire housing market? Nobody, right? Live weekly data, but we correspond
21:09it not to just the forward-looking demand, but the economics behind it. Like, when does purchase
21:15apps get better when the 10-year yield, mortgage rates, everything? We put it all together so
21:18you can't say you didn't know. That's right.
21:23People who don't read the tracker versus people who read the tracker. If you read the tracker,
21:28you're looking at everybody thinking, what is everyone talking about? I don't see home sales
21:33crashing. And you could see the inexperience from people when they never track data. Because
21:38a lot of people say, well, pending home sales just had the lowest print ever. I said, yep. And
21:43every forward-looking demand is positive. That's why we always warn people, be careful of the pending
21:49home sales data for the NER. It can be very wild month-to-month. Look at the weeklies, look at the
21:53trackers. We're not saying housing is booming or anything like that, but it's not crashing in
21:58sales. And this happened last year. Remember in 2024, we did the same thing last year. I said,
22:03the forward-looking data is getting better. Nobody cares. And then we're going to have a couple
22:06hundred thousand more home sales and everyone's going to go, what happened? And they're like,
22:10we did the same thing in 2023. We did the same thing at the end of 2022. It's not sexy to talk about
22:17boring, forward-looking macroeconomic data. But the chart daddy is trying to make it as fun as
22:24possible. And the chart daddy, who should be selling some shirts and saying, nobody, who does
22:30it better than us? Or whatever, have a new time. We're here to teach. And then when you visually
22:34could teach, then you could tell everybody. That's right. Certain people you should listen to
22:38start perfect. Absolutely. Just remember, there is a reason why there's only one group in America
22:44that love doom porn. And it's the anti-Central Bank people. And these people were born into some
22:49bondage of doom porn and they just can't get out of themselves. This is why they're all of them,
22:55all of them together. They always do the same thing. Why? Cults don't change. They just get older.
23:02And what do we say about men getting older? It's not pretty. And they get crankier and they become
23:10angrier and they don't even know. I think one of them told me I should jump off of a tall building
23:15recently. Oh yeah, I did see that. Yeah, I smiled and laughed. I said, homie, you and I should have
23:19a stock on spaces. I said, listen, to the younger guys that are part of this cult, you don't have to
23:26be part of them anymore. You live once in this world. You live in America. This time you won the
23:32golden ticket. But you don't have to age and die with this cult because what you're going to leave
23:38behind is just a series of doom porn. I ain't going to, no, no, you don't want, you don't want
23:43to go to the grave with that. Oh, I just doom porn post every single day. Well, and if you're in this
23:48industry, you're, you know, your business depends on you saying the truth and also, you know, exciting
23:54people not being like, yeah, it's all terrible. I don't know how people who have that mindset do in
23:58our industry at all. We reward attention in this country more than we reward facts.
24:07That's true. And I'm trying to change that by making facts a little bit more entertaining.
24:13Of course, me challenging people to live debates and getting their forecasts and stuff like that. But
24:17this is the society we live in and that's why we created the tracker. You remember how desperate I was
24:23to get the tracker going? I'm like, I need to get this started. As soon as you had Altos research at
24:29your fingertips, you were like a kid in a candy store. So yeah, people should read that every
24:33weekend. It comes out on Saturday. And just remember when, when everybody reads the tracker,
24:37realize that you're like one to three months ahead of everyone else. And it's not fair. I've always
24:42said it's not fair with the data that we have because everyone's talking about older stuff. So again,
24:48it's just the numbers. If they are positive or negative, it's, we don't care. We go with what
24:53the numbers tell us, right? And we could interpret it and we could put our own models or anything like
24:58that. But it is, it is the fact. And of course, facts aren't a sexy thing, but we try to make it
25:05fun. And then once you learn about it, then you could talk about more confident and you could tell
25:09uncle Dave, he needs to get a life. And then you could tell your male friends who need to sleep more
25:14and not eat salty foods and act better, you know, and there we go on in the future and life finds a
25:20way. America wins and good things happen. Good things happen. Logan, thanks for being on today. As
25:27always, we will see what happens over the weekend and then be on again tomorrow once this airs. So
25:32thank you. Yes. And Wheeler, you got to get the chart daddy merchandise going. If Trump's going to sell
25:37daddy shirts, then I got to get in the chart daddy section. I don't know how that's my job. I do
25:43not. I have a whole other job, you know, not just managing Logan. You're my handler. So
25:48you're handle the merch, right? You don't want me to just start designing the shirts. You have
25:53authority better than I do. Okay. Merch coming. All right. Thank you, Logan.
Be the first to comment