The real story on housing inventory in 2025

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about housing inventory and how mortgage rates are affecting the supply and demand equilibrium.  Related to this episode:  ⁠National Single Family Inventory | HousingWire⁠ https://www.housingwire.com/national-single-family-inventory/ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠More info about HousingWire⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://lnk.bio/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.

Transcript

00:00Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about housing inventory

00:11and housing demand. Logan, welcome back to the podcast.

00:15It is wonderful to be here. What a crazy week this has been. Fed week, jobs week,

00:20inflation week, and Fed week. And we're sitting here today. The 10-year yield last time I checked

00:27was at 4, 14%. But mortgage rates went down just a little bit. It's just been crazy pricing on the

00:34mortgage-backed security side. So sometimes, over time, this works itself out. But a lot of action

00:42with a very minimal move with the 10-year yield. But I just laughed today because when I woke up

00:49and I saw the headlines, it said Neil Kashkari said, I don't know. We might not be very far

00:55from neutral. There might not be many rate cuts left. And everybody looks at me because that's

01:00what we talked about. Whenever we get down to this level, the Fed starts talking a little bit hawkish

01:04because, I mean, the real truth is almost all the rate cuts are somewhat priced in if you get to 4%

01:11on the 10-year. Like, neutral policy is already priced in. This is why I say it's, like, really

01:15hard to get below 6% rates, especially, I mean, I can't even forecast below 5.75. And that's assuming

01:21that, you know, the spreads improve. But just on cue, you know, he comes out and says, well,

01:29you know, neutral policy might be not that far away. However, he did discuss about, you know,

01:35the dynamics that in the past, when the labor market breaks, it breaks. Like, you know, whatever was

01:43driving the cycle, whatever overinvestment was in here, it tends to break out. And you get, you

01:51know, layoffs into that because consumption starts to fall down. So on one hand, he said, well, you

01:56know, neutral policy is not that far away. But on the other hand, it says, well, we're mindful of this

02:01factor. I always say that, you know, all I'm doing is showing charts of manufacturing jobs being lost

02:06since 2022, construction workers being lost. And I'm like, if you were really serious, you'd get to

02:12neutral policy faster and sit there. So it really depends on where they want, how fast they want to

02:18get to neutral policy, which is different than me. I'm like, I would not have hiked rates above 4%.

02:23I would have already been in neutral policy. And then we take it from there. Of course, this is

02:27pre tariffs. This is 2022. But even with the Fed's inflation outlook, you know, they have 3.1%

02:35inflation this year, and then it slowly moves lower over time. So it is what it is, but we're here.

02:41And we take it one day at a time.

02:45I think you and I were talking before the show, and we were talking about what neutral policy means.

02:50Because to me, I'm like, as a layperson, I'm like, what does that mean? Is that good? Or is that bad?

02:55I thought it was sort of like a pathway to lower rates like neutral, and then you go to a comative.

03:00And you're like, they could literally stay in neutral and just stay there.

03:04Yeah, I mean, to me, the market always looks out to where the dot, by the way, the Federal Reserve

03:10should kill the dot plots. If you know, we are, we need to like hire a bunch of assassins and get

03:16the dot plot gone, because that thing has just been a just been a mess in terms of forward guidance.

03:20But in any case, the market's already anticipated, like, you know, people can debate what the final

03:26number is, but three to three and a half percent Fed funds rate. So we're not that far off from some

03:31people's neutral policy. But for the 10 year yield to go really below 4%, neutral policy is not going

03:39to do it. So this is why we created the whole door line, like we're like, getting under 380, man,

03:44you better have some really, you know, recessionary data lines to have the bond market. And that's

03:50what happened last year. Last year, the 10 year yield got to 3.63. And we're like, I was like, this is,

03:54this is, you know, you and I had that talk last year around this time, and you're like,

03:59can mortgage rates go low? I said, how can it go lower? It's just this is already pricing in a

04:02recession. So it's just hard to get to that next stage lower. But right on cue, whenever we get

04:10down to 4% or 6% mortgage of the Fed starts to like, oh, you know, but it is what it is. This

04:17is just how monetary policy works. They work with forward guidance. So it really depends on the

04:21economy, labor market inflation expectations, right? 65 to 75% of where the 10 year yield and 30 year

04:27mortgage rate is still Fed policy. So as always, you feel like the only way we can go lower is

04:33related to jobs. It's all about the labor market. What's the level? I mean, to me, it's the same

04:38premise as 2022. Jobless claims have to break. Jobless claims is the last line of defense.

04:44We're not a neutral policy because jobless claims are still low. And this is all the evidence I need

04:49that we literally have very little job growth. And they don't care. I mean, the fact that Jerome Powell

04:55said zero job growth of 50,000 is completely fine. You know, they're basically telling you

05:02what I've been saying since end of 2022. They need the labor market to break. Beth Hammock,

05:08I'm pretty sure probably didn't even want to cut rates out there. You know, so it is interesting

05:13because Myron came out today, you know, gave his little take. I'm starting to think what if they

05:19wanted him to be the Fed chair? Like, you know, he'll do whatever Trump wants. So if you want

05:25loyalty, you know, Waller's probably not the person because, you know, he's a Fed guy.

05:32Besson doesn't want the job. Hassett, you know, I don't know if the market will ever, like,

05:38take him seriously. Myron, of course, markets won't take him seriously, but he'll do whatever

05:44Trump tells him to do. So it'll be interesting going out, you know, whenever they announce the

05:48next Fed or shadow Fed president or even the next Fed president. But, you know, well, that story's

05:54still in the early stages. Still in the early stages. Okay. We have other things going on.

05:59Hard to believe because the Fed has taken up so much oxygen out of the room this week. What else

06:05do you want to talk about? Let's talk about Redfin's greatest seller versus buyer inventory

06:11data line in the history of America. I've had a lot of fun with this. I understood what Redfin was

06:18trying to say with that data line. But every doomer in America, which every doomer is mostly

06:22anti-central bank. People buy it for all of you that are watching on YouTube. Hello. I love you

06:26all. But y'all, man, the afterlife is calling for y'all and it's down there, not up there.

06:32In any case, what I disagreed with how Redfin phrased that and whoever was the marketing director

06:41of that, kudos, because they got every useless YouTube account sharing that thing.

06:46But tell us what you're talking about. So Redfin created a chart that said this was the biggest

06:52gap between buyers and sellers in terms of inventory ever. And people took that as home

06:58prices were about to crash. And what happened was they weren't really implying that. But when you go

07:05out there into the lands of the Huns and the Vissel Locks and all them, you know, that's just how it

07:11operates. So what occurred was it generated a lot of attention. And literally since day one,

07:18since that chart came out, their median prices on the Redfin data on the weeklies have been up year

07:24over year. And then what occurred is that the second, this is the best part of it. This has been

07:29actually one of the most fun things to watch in the last 14 years for me. What a bunch of amateurs did

07:35is that they kept on saying the second half of 2025 would have this big, huge price crash, just like

07:41Redfin showed in 2022. What has occurred is since June and that timeframe, not only has prices not

07:51declined like they thought, the gap is now still rising versus 2024 data, you know, and it's just to

08:00watch some of these men just like, what's this? How's this happening? You know, they feel like they

08:06were betrayed, but they just don't read. And this is what happens when people who don't read, look at a

08:12chart and they go, wow, look, it's 2008. And then Redfin goes on and says, it's the highest cancellation

08:18rates in history. Literally, the data line has not gone anywhere in three years. And they sucker everyone

08:25into this because they don't realize that every single year they revise the previous year lower. So the

08:29next year is always the highest ever. And it doesn't go anywhere. And it's just like, I feel

08:34like so many people just thought, and Redfin wasn't saying that. Redfin just says toward the end of the

08:39year, you know, pricing could be down just a little bit, which I would take because that helps

08:44affordability. But how this country works is doom porn. Any chart that could say it's housing 2008,

08:52they'll take. But this one just blew up in your face, like really bad in a very short amount of time,

08:57because now it's like the median sales price is actually growing a little bit more on a year

09:02over year basis. So there's a lot of confusion, but Redfin was never saying, like literally 2007,

09:10what do we always do when we do these Logan live shows? We go 2007 says, hold my beer. Homies,

09:18that's what it was. That's not, you know, life didn't start at 2013. But my biggest gripe with that

09:24data line is that in 2022, we saw authentic pricing decline. If you look at their chart,

09:30not much was happening in that chart. But because the supply and demand equilibrium,

09:34and we are all slope of the curve, economic people with our data lines, the slope of the curve showed

09:40a lot of buyer seller stress. And that's why it's really rare in the second half to have home prices

09:45decline is usually the median sales price declines. But we actually authentically had home prices

09:50decline. Of course, we were running at 18% to start the year, but that actually, that worked,

09:56right? Our slope of the curve was very fast. Nothing. You go to Redfin's chart, nothing happened

10:02in the second half of the day. And that's what, that's my biggest gripe with that data line,

10:06because it never captured when we actually did have buyer seller stress. So people took that chart

10:12and just abused it, you know, and then they took other stuff and then they abused other things.

10:18And who I love, like Redfin's marketing person, A plus, you got the job done. You got a bunch of

10:23people to reach and stuff and completely had no idea what it meant. But that's been really fun to

10:28watch because we're mid September, we're almost in October. Or if Logan's about to do his vampire

10:34werewolf, John Wick, all this stuff coming out there. And it just didn't occur. And now rates went lower.

10:40So it's really hard to have that supply and demand equilibrium that we saw in 2022, because 2022

10:45home sales were crashing, waterfall, fastest crash ever, because the forward-looking data were

10:51getting back. I remember, you know, saying, boy, purchase application data looks like it wants to

10:55take the existing home sales to 4 million. We had just broken under 5 million to take that next million

11:01lower is a lot, but that's what the forward data was going. Never here, not one day, not one second,

11:07not one week, not a month, anytime. It was never in the data line. It was false, but it was

11:13entertaining. So I do enjoy that. As you can see, the grin is a little bit bigger today because

11:18I see these people go, what's going on? I thought, I said, no, you didn't read. You saw a chart and you

11:24were straight doom porn 24 seven and you got burned on it, but it's okay because you're never going to

11:30read and you're never going to get help. And we don't need to help guys like you because it doesn't

11:34matter. Cause you wake up every single day like this, nothing's going to change.

11:37That was a pretty short rant for you. Really?

11:40No, that was, it was fun. I mean, I, it is, it is rare to get me like to have this big of a grid,

11:47but I've had just like watching some people just sit there and go, but I thought this was a good,

11:53why aren't, why isn't Redfin's data? Now they're accusing Redfin of like having fake sales price data,

11:59whatever. And it's just like, it's just beautiful to watch why there's a group of people in this

12:04country that do not read. And they wake up and just the soul of just living in America after 1913

12:11has just been too painful Wheeler. It is too painful for these people after the Federal Reserve was

12:17created.

12:17I said, well, that was a pretty short rant. And then you just went on another rant. So I guess

12:21I should have just taken it. Well, let's go. Let's talk about our data, right? So we have great

12:28fresh weekly data, housing wire data. And I think one of the things I wanted to talk about was

12:33inventory. So you just talked about it. The thing that you keep emphasizing where you did earlier

12:38in the year was the fact that we were getting back to a more balanced market because we finally had

12:43some inventory coming online and staying for a while so that, you know, people had choices that

12:49that helps with the overall home prices, all of that. Where is inventory right now?

12:55So to me, 2025, the best story for housing is always the inventory growth, because if you want to have

13:01supply and demand equilibrium, that's functional, you can't have what you had after 2020. That is

13:05not, and I'm not even a low inventory guy. I used to make fun of the low inventory people in the last

13:09decade. I said, there's plenty of homes to buy. Yeah, that's not a, that's not a thing, but this

13:13one broke that code. So I have to adjust, you know, even something I don't believe in when you see it

13:18and there's too many people bidding on too few homes, that's not a good thing. So the inventory growth

13:23has been a positive, but after May 23rd, things started to change a little bit. I just think that

13:30that inventory growth was so strong early on and some sellers just didn't get what they wanted.

13:36And then rates started to creep down a little bit lower. So the supply and demand equilibrium

13:40switch on May, the new listings data actually peaked. Then in June, mid-June, the data, the supply

13:47and demand equilibrium started to stabilize. Then in August, inventory actually fell, which is rare for

13:53our data line going back the last few years. It's normal pre-COVID. So now I was thinking that inventory

13:59shouldn't have peaked, should actually increase and peak a little bit later. So far, I've been wrong

14:06on that. So now that we got the two weeks out of the system from a holiday, we get to track this

14:12data line and see. So when this podcast comes out, the tracker article will be out. I can't wait to see

14:19what the data line shows, but this year was balance, right? Out of all the years 2020 to 2025, 2025 is my

14:29favorite year because it is the closest thing to balance you could get because this is just a home

14:34for people to live in. This is not open door stock or Bitcoin or anything. People make this choice to

14:41live in a house for a very long time and it needs to be stabilized. And the only way to get sellers to

14:47play ball is to get inventory up, right? Because these are no holy angels out there. They're here

14:53because they are not the March of Dimes, Sarah Wheeler. They're here to make... One of the greatest

14:58things I've heard in housing economics is I saw this report and said, oh, home prices are going to fall a

15:03lot now because the sellers don't have to pay commission. I was like, oh my God, what bar did you

15:10just get out of? These are American home sellers, man. They want all the money they could possibly get if

15:16they don't get the price they want. They just take their homes off the league. So it's just

15:20sellers don't play ball unless you get supply up and days on markets growth. That's why I have a whole

15:25days on markets. I just want the days on market, the NAR data to go back to 30 to 45. We quite didn't

15:31have that happen this year. We're still under 30, but it's a much more balanced marketplace. And this

15:36is how housing should be. Not what happened in 2020, 2021, and the early part of 2022. That was

15:42savagely unhealthy. Now it is a very healthy housing market. I'm very happy about 2025.

15:48You know, you give home sellers a bad time, but this is the American dream. If the American

15:54dream is this is how you build wealth, you better get a really good price, the best price you can get

15:59for your home because you're building wealth with that decision. As someone who has been selling my

16:04homes, I'm on the seller's side, as long as they're being reasonable.

16:08Most sellers are home buyers, so they get it on the other side too. So, you know, an investor is

16:14a whole different ballgame. That's structurally different. I just look at housing economics as

16:18the cost of shelter. I don't look at it as investment. That's my whole thing. Housing is

16:22a cost of shelter to your own capacity on the debt payment. Really? It's not an investment. I

16:26understand why people look at it as best as $55 trillion worth of home house. I get that aspect.

16:32But when I look at the economic side, I look at it as shelter first. And when you look at it as shelter

16:36first, then all of a sudden, the last 80 years start to make more sense, right? It was the

16:41anomaly period was 2002 to 2005. That was just leverage credit booms. That was the anomaly period

16:48going back 80 years. But now this looks normal. And it's just like, it's good. It's good to have

16:54this market. So even though I'm somewhat disappointed inventory didn't grow as much, but the supply and

17:00demand is so much better now than it was an early part of COVID.

17:04Okay. What else are you looking for data-wise from the tracker this weekend?

17:08Well, to me, it's the price cut percentage didn't have the increase that I thought it should have

17:14last week. So I'm waiting to see, is inventory really peaked in early August? And are we just

17:23doing the natural curve lower? So I'm trying to differ. When are we actually having the natural

17:29decline and everything? And then when that occurs, we're starting to build up to what's going to

17:33happen in 2026 because you use that framework, but also how does everything act with lower rates?

17:38Now, the demand that I've always talked about having 12 to 14 weeks of positive purchase application

17:43data, we're at seven, right? So out of the seven weeks, six were positive. So we need about six to

17:48eight more weeks of positive weekly days for it to really kick up. So I'm not looking for much on the

17:54existing home sales report coming out next week. But if you could get 12 to 14 weeks of positive

18:00weekly purchase application data and positive year over year together, that'd be the first time.

18:04And then I'd really like to see how that data works. So I'm trying to see is how early in the curve do we

18:10see this demand picked up? Like we saw last year, like last year we had, you know, out of that 18

18:14weeks, 12 were positive, five negatives. And then we saw the, you know, home sales start to kick up and

18:20then, you know, start to rise. So that's what I'm always looking for in the tracker now, now that rates are

18:26under 6.64 with some duration out there. So it's always the demand curves, the inventory curves,

18:32the new listings, price cut percentages, mortgage rates, 10-year yields, everything. It's the whole

18:37economic enchilada and it's slope of the curve economics. We're not here to doom porn anybody.

18:42We're here to just make economics as fun as possible, as understandable as you can. So you all

18:48can understand what's really going on because some people were completely let us trade. And I can't

18:54feel bad for any of you guys. Well, you know what? I think that's the perfect way to end this

19:00podcast. You know, you just don't feel bad for any of them. But no, not American bears. All American

19:05bears have failed since 1790. Economic cycles come and go, but they have all failed. The graveyard is

19:10deep, right? It's deep. And they've got the Russians, the Chinese, Iranians are all coming down

19:15there. They're all going to have a nice time at home. But since 1790, right? It used to be really

19:20tough back in the days, right? But now I always say y'all got DoorDash, AI and everything. Y'all

19:25complaining, man. Would not last 10 or 15 minutes at 7245 or 189 or any of those periods, man. Come on.

19:32Listen, I wouldn't. No, I need my modern conveniences. I love indoor plumbing. Love it. So,

19:38all right. We will end there. Would encourage everyone. We are getting close to our housing,

19:44our banking summit. That's going to be October 7th here in Dallas. Logan, you're going to be our

19:49keynote. It's going to be amazing. We have a ton of great speakers and sessions lined up and some

19:54really fun ways to interact too and network. So, everyone should join us. And Logan, you can

20:00pester Logan with your questions in person at that event. So, encourage y'all to sign up.

20:06How about those Cowboys? I'm so excited about the Niners. They could be 3-0 and I'm going to get to see

20:13Emmitt Smith soon because we're going to be on stage. So, I'm just so psyched that football

20:19season here. It's just wonderful. You love football as we do. All right. Okay,

20:24Logan, we'll talk to you again soon. Thank you.

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