- 5 months ago
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about the housing data to watch for the rest of 2025, including the interplay between housing inventory, home prices and home sales.
Related to this episode:
Housing Market Tracker
https://www.housingwire.com/housing-market-tracker/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
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:
Housing Market Tracker
https://www.housingwire.com/housing-market-tracker/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
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.
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NewsTranscript
00:00Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about what sort of housing
00:11data to look at between now and the end of the year, including purchase apps and the other really
00:17important data points. First, I want to say thank you to our sponsor, Optimal Blue, for making this
00:22episode possible. Logan, welcome back. What a weekend, what a Friday that was. And by the time
00:30this podcast comes out, the tracker data is out. And of course, what I've always tried to emphasize,
00:39supply and demand equilibrium economics should only really retrace by live, fresh weekly data
00:44that is typically current or ahead. You don't want to wait months before you get to see data.
00:50This is the beauty. And if you're a data nerd person, you're living in a lovely time. But over
00:57the last few years, we've always said the housing data typically acts better only when rates get
01:03before 6.64 down to 6%. If you take the non-seasonal factors out of the equation, and even though
01:13existing home sales beat estimates, our weekly tracker was highlighting, okay, we can get a little
01:19bit of growth. The bar is very low and not much. But if you're talking about consistent growth, you need
01:24long duration of forward-looking data getting better. And what do you mean by forward-looking
01:29data again is purchase application data was, what, 28 weeks now of positive year-over-year growth, 15
01:35weeks of positive year-over-growth. But the weekly data hasn't been as strong as it has been before.
01:42So now I think hypothetically, if, and this is still a big if, if mortgage rates do go down to 6%,
01:49we want to see how this reacts. Because so far, the August inventory data has been negative.
01:58We'll get that data reported up again for Monday or over the weekend. And also, the new listings data
02:06is also slowing down. So new listings is important because 70% to 80% of home sellers are buyers.
02:12But you can get growth in home sales with new listings data still bearing very low. And we have
02:18this because in 2022, when new listings data was fading, mortgage rates went down to 6%.
02:24Purchase application data had 12 weeks of positive weekly data. And it gave us one of the biggest home
02:31sales prints ever recorded in history, near a half a million for just one month. So I think going out is,
02:37we want to see, has inventory really peaked in August? For our data line, it's a little bit
02:43different than the NARs. Usually October and September, or October, November have been the
02:48peaks recently. But if rates go lower now, with inventory all fine, how does that work out? And I
02:54think that's where the tracker becomes a little bit more sophisticated, a little bit more fresh,
02:59because what we're seeing right now are going to happen in the sales data 30 to 60 days out.
03:05And you're talking about three, four months out in the existing home sales report. So
03:11that'll be the fascinating thing going out in the future. If mortgage rates were at 6% and are
03:18staying there, that's a whole different question, but we're not quite there yet. But the last three
03:23weeks since mortgage rates have gone below 6.64, all three weeks, at least for purchase
03:30apps on the weekly data have been positive. The year over year data has been positive. So
03:34we'll keep an eye on to see if that continues. Because if you get 12 to 14 weeks of that,
03:39that would be a material change. You will see that eventually in the existing home sales data,
03:43like we've seen in that one big print early 2023. And we had a couple of hundred thousand more home
03:49sales in 2024. Early 2025, we had one from the lows of last year. Let's talk about inventory for a
03:57minute. Because I think that when you and I have talked about this, when I've edited your articles,
04:03the tracker about this, I'm often surprised at where the seasonality cuts off for inventory. Like I would
04:10think like, isn't it like, you know, the beginning of August, because people are headed back to school
04:14soon. So talk about where we are with inventory and why you think that's either we can put that
04:20down to seasonal or if it's something else. So if you look at the NAR's inventory data,
04:25they typically peak June, July, August. If you look at our data, our data is fresh live homes that
04:34do not have a contract. So people can keep their homes up there for longer and longer and inventory can
04:40stay elevated like it has the last few years. But normally with our data line as well, July, August
04:49inventory is starting to fall. That was pre-COVID. So we haven't had that happen up until recently.
04:57And we kind of picked up on this mid-June. Like it was mid-June when we did that podcast and we wrote
05:03that article. You know, the housing data is starting to stabilize. Now, partly of that is inventory growth
05:08was very good. I was all happy. Big smiles here. But with our data line to keep that inventory
05:15growth above 33%, you really need data to stay weak. So when rates started to creep down a little
05:20bit, it was stabilizing in mid-June and then July the 4th came and now there were mid-August, almost
05:25to September. Inventory falling cumulatively is different. So we're not back to normal, but we're
05:33good enough to have a sane housing market. This isn't the seller housing market where prices can
05:39keep elevating and accelerating. There's enough supply there. And that has always been my thing
05:44since, you know, mid-2020 where people were talking about big, major deflationary crashes and home
05:52prices on a nominal basis, things we haven't seen since the Peloponnesian War, even worse than 2008.
05:57That wasn't really going to be the case with inventory. But the problem was that when you have
06:01shortages, and I'm an active inventory guy, as long as I have active inventory above 1.52 million,
06:06I'm not a low inventory person, but this was different. So the fact that higher rates did
06:10their thing and created more inventory, there's more supply, this is a more buyer's market than
06:16we've had in the previous years. And I see that as nothing but a positive. But we're not quite back
06:21to normal. So it is going to be interesting for me to see what happens with our inventory data and
06:26what happens with the NAR inventory data, especially if rates fall. Because when rates
06:31fall, same model as always, 70% to 80% of home sellers are buyers. And then the first time home
06:36buyer comes in or other buyers come in that don't provide your house, the inventory has a hard time
06:42growing in that environment after a qualified mortgage. So the inventory story becomes a little
06:46bit more fascinating to me because we haven't had this happen in recent years where active inventory
06:52starts to fall in August. The price cut percentage is stabilizing out. But we have much more inventory
06:57now than the last few years. And the product out there is more expensive than historically. So
07:03there's a lot of variables working here. Okay, let's talk about that home price variable.
07:08So Mike Simonson just this week wrote an article for HousingWire where he talked about home prices are
07:14about to go negative. And let's qualify that. It's not like he sees some crash or anything. And going
07:18negative just means like nationwide, they're not actually, you know, growing. So tell me what you
07:24think about that. And tell me how that fits into your forecast. So I'm still low for 2025, because I
07:33anticipated a lower price growth year. Majority of the year, and I use I based off mine's case
07:42Shiller index. Mike Simonson was using the price per square foot, our own median sales price data
07:48should be negative September and October, because last year, I lost my forecast because pricing was
07:53stronger there. I need more weakness to stick for my price forecast to work. Because majority of the
08:02year has been has been higher than my than my forecast. And this goes back to 2022. A lot of people
08:09thought 2022 home prices were down like 6% for the year. But home prices started at 18% growth. And
08:17they came kind of down to 66%. So on that yearly thing, got 2022 was crazy, that really happens. But
08:24because home prices started off so hot, 2022 price forecasts, oddly enough, hit the nail. And for the
08:32wrong for the wrong reasons, you know, I had like 6% price growth, because I thought rates are going to go up
08:37and cool down prices. But prices were so strong that mortgage rates getting to 7% got my price
08:43target right. And that's just that's just because the whole thing was crazy. That year here, I need
08:49more price weakness to get to my 1.77%. And I base it off case Shiller. I don't I am not using what Mike
08:57uses the price per square foot. And not even talking about our own median sales price data, which should
09:02be negative from for my price forecast to work, I need our data to be negative in September and October.
09:07But you can see the slowdown in prices. Very slow, sticky. That's how nominal home prices have worked
09:15since 1942, unless you have distressed sales. But my concern for my forecast is, if rates go lower,
09:22and we're already seeing inventory fall, what does that do? Because I lost my forecast last year because
09:28of this. And this year, I'm keeping an eye on on it. And again, what we see is going to be coming out a
09:36little bit later on the case Shiller and the existing home sales report. So I'm a little bit more mindful
09:42of the supply and demand equilibrium, because if I'm going to lose my forecast, again, being too low,
09:47then I need to figure out when did that happen last year was really easy for me September and October,
09:52where I was like, I'm toast. We ended up being up 4% last year. And the forecast was for 2.33%.
09:59Okay, so I know that the existing home sales market is so much bigger than the new home sales market.
10:06From your perspective, does what's happening in the new home sales market have any impact on prices
10:12in the existing home sales market?
10:13What are five club rules, Sarah Wheeler?
10:15We never get those two mixed up.
10:18We do not, under no circumstances, ever mix the new home sales market.
10:23I know, but there have to be some impact.
10:25No, there isn't. I am telling you, we have human beings, adult men,
10:31who supposedly graduate kindergarten, telling people that existing home prices are down 23%
10:37because they see the new home sales and they even chop off the data lines. Sarah,
10:41I understand why the Russians hate us. I understand why the Iranians and the Chinese hate us.
10:46I don't understand why the anti-central bank people live in America if all they're going to do is cry
10:51and hide behind goofy ass names all the time. I don't get it. Why do you think I want these people
10:55on live baits? Because they constantly tell people existing home prices are crashing for years.
11:02It's only one clan, only one clan. And this is why we try to teach people what happens in the resale
11:08market is different because you could have times where the median sales price for new homes really
11:13takes off because of the makeshift of sale prices. And that has nothing to do with the existing home
11:18sales market. So two different things, because what's happening in the new home sales market is
11:23actually very, very healthy. What was the whole thing in 2022? We need rates to go up higher to put
11:30home builders on there. And that's what happened. They're making deals. They are efficient sellers
11:36because they sell homes as a commodity. So that really doesn't apply too much with the existing
11:42home sales market because there's a divergence in the pricing. And I've seen that mix up so much
11:52that I created those fight club rules. Because if you did, then you would be wrong for three years.
11:58You would go, you would show the census data like some of these clowns do and actually go,
12:03oh my God, home prices are down 23%. I get this from the government. Grown ass men, old and just like,
12:10they can't leave this planet fast enough. They were just, oh, that's not how it works.
12:15So the supply and demand equilibrium for the existing home sales market is different. And I think the
12:20greatest factor that we've ever seen in our history is that the monthly supply for new homes was like
12:26eight to 10 months when the monthly supply for existing homes were still sub 500, sub four and a
12:32half. Even now there's a, there's a very, very huge historical gap between the monthly supply of
12:38existing homes and new homes and new homes. Again, it's categorized to completed sales in construction
12:45hasn't started yet. This is why we don't mix the two. This is why we never mix the two because right now
12:52the builder stocks are ripping higher and people are like, how do I explain this? I can't do my
12:57doom porn newsletter. If I told people builder stocks will be down 40%, different marketplace,
13:03keep them separate. That's why we have the fight club rules. We never talk about the new home sales.
13:08The fact that you brought this up, Sarah Wheeler, get a ruler, shame.
13:13Listen, sometimes I just want to trigger you. It's just fun to watch. And you know,
13:17people might be new. They may not know those rules. So we know what is it like a ghostbusters
13:21don't cross the streams. Don't cross the streams, you know, better, but again, different marketplace.
13:28And I'm very simple. Go type in new home sales, monthly supply, and then look at the last few
13:34years, go type in new homes or existing home sales, monthly supply. So different years, they can mirror
13:40each other to a degree. But this was a very unique cycle in so many ways. And I, it's like, it's like
13:48one of these things, everyone's saying, why are the builder stocks just ripping and killing it? And
13:51oh my God. And you have all these people like new and tenure yield goes lower. The builders could sell
13:57homes. They sell homes efficiently. Why? They don't have anybody living there. They just make it, build it,
14:02sell it next, right? And home sellers and buyers, they got to sell, they got to move, they can go all
14:06these things. They got to deal with agents and sellers have real high expectations for their home.
14:11There's all these things. Builders don't care. Why, Sarah? Because they're not the march of dimes.
14:17They are not the march of dimes. And human beings are human beings always. And human beings will try
14:22to make the most money as possible and try to get a deal. But the builders are like, I got to move
14:26product, man. Okay. I don't want supply building up because then everybody's going to ask what price
14:31comes when our margins go down. They are what I call efficient sellers, where the existing home sales
14:36market has still a human element into it. And they can take a very long time where the builders can't
14:44necessarily say, oh my God, I got eight homes here. Let me delist them. Oh, I can't do it. I can't
14:50delist these homes, right? So it's a whole different world, right? That's why I say just don't mix these
14:55two. Okay. So everything that we've talked about so far is the data that you cover in the tracker every
15:01week. You get the data on Friday night. You spend your Friday nights looking at that data,
15:07doing the tracker. And I will say to our audience, we've made it much easier to find. So it's
15:12housingmarc.com slash housing market tracker. There's a whole page. You can look at all of the
15:18charts that Logan has done for all of, I think it's like eight different things, nine different things
15:22just on that page, plus all of the most recent housing market tracker. So it's everything you've
15:27talked about, but it's also mortgage spreads. It's price reductions. It's what to expect next.
15:35I care more about the economics of housing, all the variables that go into it. So we have a whole
15:41section of mortgage rates, 10-year yield spreads, what happened, what's next. And then there's the
15:46inventory data, where is it going, price cut percentages. And then we have the demand data
15:51where we look at the purchase application data, but then we look at our weekly pending contracts.
15:55And then we look at our total pending sales contract. We put them all together. And this
15:59way, it's a fresh live view in the weekend. So you don't have to wait two, three months to get it on
16:05the existing home sales report, right? And this keeps everybody in. I think this last week was a
16:09really good example. The gentleman that I debated on Twitter a few months ago, who thought home sales
16:15were crashing, going to get to 3 million, then eventually down to 2.3 million. I go, homie,
16:19if that was the case, we purchase apps, it would be collapsing. Our pending contracts data would be
16:25collapsing. That would be the second biggest home price or home sales crash in history.
16:29None of it's there in the data. So the fact that we were up slightly, what have we talked about here
16:34for months? Listen, it's a very, very low bar in home sales. So if you get year-over-year growth,
16:39take it with a grain of salt. It's just an extremely low bar move higher. But the tracker also
16:44confirmed that. So we'll let everyone know. And it's kind of like the new listings data.
16:49If there's stress in the housing market, new listings will go vertical. If you want to listen
16:54to people that talked about this or rushing to sell their house and all that stuff, but had no data to
17:00verify it, okay, that's fine. It's a free world. You can do what you want. But if you're serious,
17:06if you really care about this stuff, chart daddy's here 24-7, never sleeps, all day, all night.
17:15Confirmed. You are putting things out all the time. I would also let our audience know you,
17:22Logan, you are our featured speaker at the Mortgage Bankers Summit that we are having in October.
17:28Everyone should come. It's a one-day summit here in Dallas. It's going to be amazing.
17:32So people look for that. And also check out the tracker. And Logan, thank you so much for being on.
17:37Pleasure, Sarah Wheeler.
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