- 1 week ago
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about the idea of a 50-year mortgage, housing demand and when we’ll get government data.
Related to this episode:
A 50-year mortgage could double your interest payment
https://www.housingwire.com/articles/how-much-would-a-50-year-mortgage-cost/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
More info about HousingWire
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To learn more about Trust & Will, click here.
https://trustandwill.com/
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.
Related to this episode:
A 50-year mortgage could double your interest payment
https://www.housingwire.com/articles/how-much-would-a-50-year-mortgage-cost/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
More info about HousingWire
https://lnk.bio/housingwire
To learn more about Trust & Will, click here.
https://trustandwill.com/
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.
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NewsTranscript
00:00Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about that proposal on a
00:1150-year mortgage that we got over the weekend. First, I want to thank our sponsor, Trust and
00:16Will, for making this episode possible. Logan, welcome back to the podcast. I know you are so
00:21excited. I got my Christmas sweater on early because I get my shorts back. I am very,
00:29very happy. God, that was painful, man. Oh, all that time and all this data. And I'm like,
00:35I can't put my charts up because I don't have the tables and stuff. So very happy that the
00:40shutdown is over. Boy, the airline thing really got people going. And I think you said that early
00:47on. You were like, yep, as soon as we start massively missing flights. I mean, it's a huge
00:51part of the economy. It's something that affects everybody or a lot of people.
00:56There's always like, you know, pain points, you know, and they picked this one up and it really
01:03did force people to start moving. But wow, what a weekend, you know?
01:09Yes. Okay, but wait, I want to talk about your charts for a second because my question was like,
01:13last week was supposed to be a jobs week. This week was supposed to be inflation week.
01:17Do we know yet when we will get the data? Will it be looking backwards or is that data just gone?
01:21We don't, we have no idea yet. I'm trying to figure that out on how they would,
01:26you know, because they've got to do the work, you know, they've got to gather up all the stuff
01:32and do the work. So I'm sure they're going to give a date and time where everything gets released
01:36from the previous and then start the schedule. So, but again, they have to sign the bill and
01:41everything and we take it from there. We take it from there. And of course we are recording this on
01:47Monday on Tuesday, Tuesday's Veterans Day national holiday. So they won't be working then I would
01:51assume. So it might still be a little bit. Yeah. Might, might, might, might be a week. I mean,
01:56it just depends, but I mean, we're, we've gone past this stage, you know, so it's, it's good. We can get
02:03to our normal data lines back. And that's very important at this stage. It was like the worst time
02:08to have like no data, like right in the middle of everything. So what's going on with policy and
02:13everything. So, but it is what it is. It's passed. We move forward with it. We move forward. Okay.
02:18So let's talk about the big news this weekend was Trump's announcement that a proposal really,
02:24really throwing it out there, right? Doing a test balloon to see what people thought about the 50 year
02:30mortgage. So let's, let's talk to you, Logan. What do you think about the 50 year mortgage?
02:34You know, Sarah, you didn't know me in the last decade. I did not, but you did kind of
02:41because Sarah Wheeler in 2014, somebody nominated me for top 40 under 40 and Sarah
02:50Wheeler was the person who rejected, you know, the application. And then she didn't believe it
02:58that she did. And then they went back and looked and it was you that signed it off. So
03:02it is fitting. It is fitting that I'm here right now. And we are, you know, talking about this from
03:10the rejection that, you know, Logan wasn't good enough, you know, back then, but now he's the
03:17chart daddy. So sort of out. Okay. Well, that, that is true. I still feel bad about that. I was
03:24like, Oh no, maybe it wasn't me. We went back and looked, no, it was definitely me. So anyway,
03:27okay. Uh, uh, I have to pay my penance on that one. Okay. So let's talk about the 50 year mortgage,
03:33because I know you think when we've talked about the 40 year mortgage before you're like,
03:37that's a terrible idea. So in the, in the past decade, I always talked about, you know,
03:40if they ever allowed a 40 year mortgage to come in, I would go to Congress and testify against it.
03:45And I would list the reasons why now in the last decade, um, housing was a lot affordable. You know,
03:51we had, uh, low mortgage rates, mortgage rates range between three and a quarter to 5% for like
03:5710 years. Uh, we had a lot more inventory back then. There was tons of choices. It was the weakest
04:03housing recovery ever. Uh, uh, and that was my whole premise, you know, from 2010, all the way to
04:082019, when I did my work back then before I joined housing wire, that we would have the weakest recovery
04:13because household formation demographics, there was all these, all these variables that,
04:17you know, in there. So people started talking about, maybe we should do a 40. I said, no,
04:21the 30 year it's the 30 year fix is fine. You, if you amortize to subsidize demand in a sector that
04:28is very subsidized already, you're not allowing the process of healing to work itself out. So we
04:36are here today, October of 2025. What do we know as a fact? Number one, why, why were we team higher
04:42rates? You know, uh, early 21, we need inventory to grow inventories grow, right? It's no longer a
04:48savagely unhealthy seller's market. Number two, we needed the home builders to be put on their bleeps
04:53because they were pushing prices up. They were canceling contracts and, and, you know, getting
04:58people to, to pay up. They can't do that anymore. So they're making deals and their completed units
05:04of sale is up. So the marketplace corrected itself in terms of getting more supply and the supply demand
05:12equilibrium gets fixed. If you amortize something and they just went straight to the 50, they didn't
05:17mess around with the 40. It, all it is, is you're subsidizing a marketplace that is already very
05:23subsidized. It prevents the supply and demand equilibrium from working. Right. And boy, like
05:28when we wrote those articles and we showed the net interest costs, of course, nobody's going to hold
05:32their mortgage for 50 years or even 30 years to a degree, but the lack of equity build and the upfront,
05:38just for something where mortgage rates just fell a little can change the dynamics. It's, it's so not
05:45worth it. And it was, it was encouraging to see that, that X or Twitter where everyone really hates
05:51each other. This was one thing that united the clans. I mean, this was like Braveheart all over again.
05:58Everyone was just like all in on this. And I thought the explanations we gave, uh, uh, especially on the
06:04Instagram live that, you know, this isn't, this isn't a healthy outcome. The 30 year fix is already,
06:11uh, very subsidized in itself. The tax policies, everything is kind of rigged for housing to get
06:16here. And if you have an affordability issue, it has to work itself out over time. Price growth slows
06:22down, wages rise, then rates fall. And then you get, you know, demands picking up again. And you look
06:28back in the last few decades in housing, this, that has occurred before, uh, I take 2008 out of
06:34the equation. We've, we've dealt with, uh, situations like this and it in over time, it does
06:39fix itself out. Yeah. I think when, um, when I wrote the story about like, what does a 50 year
06:45mortgage cost the consumer, right? What would they end up paying? I was so surprised because I thought
06:51if you stretch out 50 years, that monthly payment would be so much lower, but it's really not. It's a
06:56couple of a hundred dollars lower a month. And then you're paying like twice the interest,
07:01obviously, because it's a really long loan. So to your point, no, one's going to keep it 50 years,
07:05but like an arm loan would be better. Or, I mean, there's other options besides this, right?
07:10You know, it's, it's one of the things that people, uh, at first they were doing like an apples to
07:15apples with the same rate. And I was like, uh, no, the longer the amortization, the higher the rate
07:19is. So I modeled something out for people, you know, uh, you know, 42 to 57 basis points
07:25higher in rates for a 50 year amortization using a 20, 30 model out there for a 40, you know,
07:31you could get, you could get that area. So it, it isn't like the massive savings that people thought,
07:36but when people saw the interest, like everybody just like what the, you know, and the lack of
07:45equity buildup as well. So, um, yeah, it's just, I, I, I, I, my whole thing in the last decade was
07:53never, you know, fighting the people that said lending is tight. We need to lose lending. I said,
07:57no, we're not. We're still very liberal. We have FHA, you know, you know, when, you know,
08:01when the next downturn or, you know, when home sales collapse, don't worry about it. Homeowners
08:07are doing good. We ran the gambit on this for three years and over the next hundred years,
08:12nobody could take this away from us. We never flinched. We set homeowners in a good spot,
08:15new listings data never took off, never even got back to normal because homeowners are good,
08:20but amortizing a 30 to 50 year, just subsidize of a market even more and doesn't allow that
08:27supply and demand equilibrium to work out in itself time, you know, and this is the problem
08:34with having, you know, you can look at housing in two different ways. Number one, you could say
08:38that this is the third calendar year of the lowest home sales ever. We're going to go into the fourth
08:42year. There comes a point where people start, you know, getting really upset and you can hear,
08:47you could just see from the start, the white house was very, you know, on this because they see
08:52so much of the, uh, dislike in the economy, um, federal reserve staffers that, you know, housing
09:01is life. Housing is progressing forward. Housing is dating, having sex, getting, getting married,
09:08having kids going into the future. It's this whole equilibrium. And, you know, when you get sales
09:14depressed for so long, you get stuff like this and I, and I'm just standing my ground that I was
09:20like this in the last decade, I'm this today, I'm going to be this until the day I die.
09:24The supply and demand equilibrium is working itself and we cannot subsidize something to 30 to 50 years
09:31and have less equity build out and more interest costs and stuff of that nature. So I'm glad to see
09:37that this was a unanimous take on this. And even, uh, Bill Pulte of the FHFA kind of somewhat walked
09:44it back to a degree the next day talking about, you know, this is just one of many things that I
09:49thought the visceral reaction that everyone gave on this idea was good to see because, you know,
09:56housing's very subsidized, you know, it's a very subsidized marketplace, but when you have a sector
10:01of the economy where you tell people, this is your home, you want to live here, but also it's your best
10:06investment. It's, it's a problem, right? Because you can't make your house, your best investment,
10:12or, you know, if you're, if the job is to keep it inflated, that you have periods of times and
10:18that's what COVID was. Okay. So I did think, um, it was interesting to get that sort of unanimous,
10:24like people are like, Oh no. And Pulte say, he put out a tweet that said, um, you know, we hear you.
10:29So we, we got the message, right? So, and again, a lot of times this administration, especially
10:34everybody has always done trial balloons, but they do it. Like they put it right out there.
10:38The most, you know, kind of some outrageous stuff. I think about what they've done with
10:41the GSC release, you know, putting the AI picture of him at the stock exchange with the new name and
10:47all that kind of stuff. And then they want to see what the reaction is. But this reaction was huge.
10:52And who was the ringleader of this whole thing? You know,
10:55you definitely were the one that was like, Oh heck no. It reminds me, Logan, like, um, when,
11:02uh, Joe Biden in the first, uh, month of his presidency or so he was, he was coming up with
11:08a lot of things that they wouldn't have helped because the, the market at that time, right?
11:13There was just too much demand. And he was like, Oh, we're going to make down pay. We're going to help
11:17you with down payments, or you're going to get a, you know, a better thing. If you've never been a
11:21homeowner, we're like, wait, wait, wait, don't, don't make the demand side better. At that time,
11:26we needed more help with supply. Like the demand side, wasn't the problem. What do you think the
11:30problem is that they're trying to solve here that you're like the better way to solve it is X
11:35time. I mean, they're, they're, because they're trying to solve affordability.
11:40They're, they're trying to, they're trying to solve affordability by subsidizing demand even more.
11:45And that's just, you know, I, I say this because I wouldn't have been team higher rates in 2021
11:53early. If I didn't think this was going to be a savagely unhealthy outcome, because it would take
12:00time to fix this wages rise, household formation, dual incomes, price growth slows down, right? It
12:07works itself out. And I, I, I show people like over the weekend, people said, but it's never going to
12:13get better because I said, we have the 1980s as a really good example. And unfortunately not a lot
12:20of people remember prices were escalating out of control in the seventies and mortgage rates went
12:25up to 18% and home sales crashed in the 1980s. Inventory was much higher. The credit data was
12:31worse back then home prices didn't fall. They weren't negative, but on adjusted to inflation,
12:36we had some negative years. And during that timeframe, wages rise rates fell and the equilibrium
12:43over time worked itself up. And that's, unfortunately that's the, that's the healthiest
12:50thing that could get you there. So I understand the, the, the desire to get a quick fix.
12:57Um, but this is probably the least effective way. And, and I say this, you know, cause a lot of people
13:03were, you know, one of the, one of the well-known market players on, on social media was saying,
13:08you know, uh, housing's getting worse or new home sales getting worse. And I said, that's not true.
13:12And I said, we have models that we work with. And when mortgage rates get from 6.64 down to six,
13:18uh, the builders, their confidence data gets better. Their purchase application data gets better
13:23and their new home sales get better. And so new home sales at a three-year high and people go,
13:28well, that data is wrong. And yeah, I admit I was the first person to admit it's going to give
13:31advice, but it's getting better. And the problem is if rates were just staying at 6% for a long period
13:38of time, I don't think we even have this conversation because sales start to grow and people start to
13:44feel a little bit better. But the problem is when rates get down to 6%, you know, I went back and
13:49watched the CNBC interview I did like five weeks ago where I basically told CNBC, the fed freaks out
13:57because if people have sex and they buy homes, they buy more stuff. And what Neil Kashkari said in
14:022023, how are they supposed to balance out our economy? If mortgage rates get near 6% and housing
14:09shows life. And they stuck with that model all the way. And this was before, you know, Powell came out
14:16and was very hawkish about the next rate. They fear this for some absurd reason. But in any case,
14:24inventory's up, price growth is cooling down. There's no more massive seller market. The seller
14:29market was terribly unhealthy in that where the sellers have way too much power. And mortgage rates
14:34get down to near to 6% or the high fives and housing picks up a little bit. It's going to be okay.
14:39You can't be one of these, well, you can't have rates go lower because prices grow. Prices have gone up
14:45pretty much every year since 1942. This is a defeatist mindset that we have to crush demand for
14:5210, 15, 20 years to maybe about, no, you don't have to, you have to find that supply and demand
14:56equilibrium and let the marketplace kind of work itself out. This is why I'm not, I'm not an advocate
15:02of easing lending standards or 40 year mortgage. God, a 50 year mortgage would be even worse.
15:08Inventory is growing, price growth, cool downs, wages are rising still where rates go down a little
15:14bit, get a little bit demand and it picks itself up and household formation. And we just go from
15:19there, but subsidizing demand to this kind of level, I can't endorse. And I'm just staying true to myself
15:25as I was in the last decade, as I am today, as I was two years ago, last year will be for, till the day
15:32I die. You're very consistent, especially on this. You're like, oh no. Okay. So you talked about a little
15:38bit already, but the tracker data, right? So we saw inventory, we saw something strange happen with
15:45inventory and pending sales. So walk us through that. So I was waiting for inventory to hit a
15:52yearly high. I did not believe that the peak was in August. So I was sitting there for months and
15:58months and months and waiting for inventory to increase. It wasn't happening. So the growth rate
16:02of inventory with our data line at one point was 33%, it got down to 60. But I was still close
16:08enough to get it. And what's happened is that before this last week, the three weeks, we had the two week
16:13holiday that messes up the data. Of course, we had the AWS outage, which caught a day. And then we had
16:19one week where inventory went up a lot and it gave me my yearly high. And then it really, you know, it was
16:25just very wild. Now all of that is kind of out of the equation. So it does look like if I adjust it to
16:33the, to the proper model, we never got back to a yearly high. We're just slightly lower. And this
16:39week inventory fell noticeably pending our weekly pending sales showed 15 and a half percent year over
16:47year growth. That's, that's very big for a weekly pending home sales print. But this week it looks
16:53like seasonality is a big driver. And last year at this time, mortgage rates went up to 7% back then.
17:00You know, that's when the 10 year yields started doing a sharp reversal and that impacts the weekly
17:05data. So we have a very, very low comp on the sales data and seasonality kept in. Because if you saw
17:11that right away, you're like, whoa, that is a big drop on inventory. Price cut percentage is falling
17:17year over year growth. But there's some variables in there that you have to take it in context.
17:22So it was a good week. It was a good week pending sales are up. The inventory data looks normal. We
17:28still have over like 16, 17% year over year growth in inventory, very healthy marketplace price cut
17:34percentage is still elevated. That means the buyers have a little bit of more say in this market than
17:39they had the last few years. Not a little, but a lot more say now. So looks very good. Looks very
17:44healthy. See, the thing is that I look at 2025 very healthy. I looked at late 2020, all of 2021 and early
17:512022 as unhealthy, very unhealthy, savagely unhealthy. So it's just working itself out. So, you know, get rates
17:58down here. Just keep them down here. Get it going forward guidance. Fed staffers, forward guidance, man. I tell
18:07you, you got this layup right there, you know, and we just push it off and getting ready for 2026.
18:14So do you think, so this was the longest shutdown in history, but still, you know, not that long. I
18:20mean, it was, it was a little bit over a month. Do you see, think we're going to see any jobs data that
18:25does this affect any of the jobs data?
18:27I would say that, you know, I mean, I just remember in the last shutdown, housing data slowed down during
18:33the shutdown. Of course, things take longer. You know, I do assume that we're going to see this in
18:37the existing home sales report coming up for this week. And then it just kind of rebounded back to
18:41trend. So whatever weakness we see in the data, because of the shutdown, the Fed's going to take
18:48it with a grain of salt because then things are going to come back. So there's other data lines
18:54that I track that are a little bit, maybe too nerdy for people. And it looks, everything was okay.
18:59Nothing breaking too bad out there on the consumption side. So I'm glad it's over. We should get things
19:05going again because you really need air travel, you know, for holidays. Cause the problem is if you
19:10don't have air travel during the holidays week, the consumption data starts to get hit to a degree
19:15because, you know, hotels and all this stuff, and it really puts the data lines into a very bad tale.
19:22So it's good that we got, got it up and going again. I know, I know Trump was really advocating,
19:27Hey, everybody who works at air traffic control, get back, everybody get back to work. Cause
19:32really the airline story, uh, got this thing going. Yeah. Listen, I have big plans for Thanksgiving.
19:38I need that air air traffic controllers to be there. I need air travel to be good. So I'm going
19:43to go to Scotland and see my daughter who now lives there. How fun is that?
19:47Uh, uh, uh, a Scottish, uh, Thanksgiving.
19:51Oh, wait. Okay. Can you bring out your Scottish accent? Most people probably don't know you have a
19:56Scottish accent. I mean that you can, you can do this.
19:59I don't know. You're trying to go to yourself to see your little daughter in Ireland. No,
20:05I don't think, wait, that's, that's right. Is that Scottish?
20:09You know, I don't know. I don't know. It's not Scottish to me.
20:12I, in my old acting days, I used to do voiceovers and then, uh, the mortgage spreads were good today.
20:18So of course I'm bringing Joe to see out and forget hugging a mortgage spread. Give it a kiss now
20:23because we were literally would not be near 6% without mortgage spreads improving. We'd still
20:28be fighting that 6.64 and seven level out there. So I was thinking I could do my Sean Connery
20:35impersonation that mortgage spreads do look savagely sexy this year compared to the past.
20:41So very funny. Logan was pretty, Logan was wild back in the 1990s. So there were no charts back
20:48then. It was just not, it was all different. I did want to say, I wanted, uh, we just got out
20:54of a meeting where we're, we're talking about the housing economic summit that is coming up
20:58in February and people need to be planning for that now because, um, you're going to be there.
21:03You're, uh, obviously our, uh, future speaker. We also are going to have Barry Habib and this is
21:08going to be fun. Many people in our audience know him from MBS highway. Of course, now he's also on
21:12the fanny board. Um, and you guys, he's going to have, you're going to have a session. He's
21:16going to have a session. And then you guys are going to be on stage together. We're going to
21:19have a Q and a, it is going to be so much fun. Um, so people need to sign up for that. Don't wait
21:25because prices are about to go up. I just got out of that meeting. So, um, and it's going to be
21:29really amazing. Last year was great. And I feel like we learned things from last year are going to
21:33make it even better. I always think it's nice when you have so many economists and data analysts
21:39in one day, like that's not fair. Like it's usually, you know, like when I go speak at an
21:44event, I'm, I'm probably most likely the only economics person, but here, you know, we have
21:48the economists for the NAR blight, Barry Habib. We're going to, we're going to have about eight or
21:53nine more economists and data analysts out there to talk about. So this way you get a full kind of view
21:58of what multiple people are thinking about out here. And the Q and A's for anybody who's seen
22:03the Nurtur live, the Q and A's are a lot of fun, right? It's a lot, it's a, it's a lot of fun for
22:08me. And, you know, when, when Barry and I get to do it and everybody in the audience is very familiar
22:12with us both. I think that'll be a very special treat. I do too, to see like where you guys agree,
22:18maybe where you have a different take and why. Um, also I will say that we've structured this. So
22:23it's like a session on, you know, sort of like the, here's what's happening. And then we have
22:27like a tactical session after it, where people are talking about how they're going to apply that
22:31data into their job. So it's very, um, it's very focused on like you get insights and you're going
22:37to be able to take it and do something with it. So super excited. Everybody mark your calendars.
22:41I know it just makes, it makes it feel like, you know, that rejection in 2014, Sarah, you know,
22:47that you came and called on to me and asked me for help on this. And I thought about,
22:52this is the lady who said I wasn't good enough in 2014.
22:55Listen, those, all of our award programs are super competitive. They were then they're even
22:59more now. So just, just, just, just, just for you, you're not even the worst, uh, uh, person back
23:07that in my mind, I made a joke in 2013. I applied for all the economists jobs. I was a loan officer,
23:13you know, just having a little blog and I applied for them and I, and I told them all in 2013,
23:18I do not have the qualifications for this clearly. Cause I don't have a PhD in anything. I just wanted
23:24to write this application and email here because 10 years from now I'll be the best housing analyst
23:29in America. And I sit here and I joke about it. Cause some people remember that. And one of the
23:35first, one of the people who responded back to me back then, uh, ended up working with the economic
23:39team with the white house. And he even said, Oh no, Logan, you do really good work. I, I, I just
23:44don't think this is, Oh no, I know, I know this is not it. But 10 years from now, you know,
23:48they'll call me the chart daddy. I'll have a lot of big hair and we'll be fighting the American bears
23:55and the Russians and the Chinese and Iranians, this information. And I just wanted to leave this
24:00here just to remember. So thank you, Sarah Wheeler. Cause I'll never forget. You're really
24:06the person that rejected me back in 2014. I was. Oh yeah. Well, we appreciate you now. Thank you so
24:12much for being on.
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