- 2 days ago
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about the economic signals for the 2026 housing market.
Related to this episode:
December housing data provides early signals for 2026 market
https://www.housingwire.com/articles/december-housing-trends-2026/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
More info about HousingWire
https://lnk.bio/housingwire
To learn more about Trust & Will visit https://trustandwill.com/
Related to this episode:
December housing data provides early signals for 2026 market
https://www.housingwire.com/articles/december-housing-trends-2026/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
More info about HousingWire
https://lnk.bio/housingwire
To learn more about Trust & Will visit https://trustandwill.com/
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NewsTranscript
00:00Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about the housing data
00:11he's looking at and what it tells him about the housing market in 2026. Before we jump in,
00:17I want to say thank you to our sponsor, Trust & Will, for making this episode possible.
00:21Logan, welcome back to the podcast.
00:23What a weekend. What a great tracker article to give people an idea about 2026. So I'm very,
00:32very ecstatic. And by the way, before we continue, I just want to thank everyone for keeping us a top
00:40business news podcast. I think for the year, having the number six ranking on Monday morning is very
00:46good for us. For a small niche player like us to be ahead of Bloomberg or the Wall Street Journal,
00:52even if it is for a short time. Award winning podcast, Sarah Wheeler. That's you. You're the
00:59queen, you know. And it's been a lot of fun. It's been a lot of fun this year.
01:04It's been amazing. I love that top six. That means a lot. Thank you guys for listening. And
01:09I have to give you kudos. Okay, over the weekend, you posted a photo. It was an AI photo that looked
01:16like you were part of the cast of Stranger Things. And what is the total number of people who have
01:21viewed that video now? It's been a very interesting few days. But of course, I'm a fan of Stranger
01:30Things. And I just had a template. I just went ahead and did an AI thing. And I think we're close
01:36to 10 million views now. And it's funny because if you're able to trick maybe actors and makeup artists
01:48to think you're part of this thing, it just went crazy. And of course, my analytical side, I'm seeing
01:55the secondary effects of what's going on and the increase in followers and everything. And what
02:01happens when you have something go viral. But yeah, I was not expecting looking on Stranger
02:09Things on Instagram. And all of a sudden, it's me smiling. And then all of a sudden, you're like
02:15the top marketing thing for the Netflix show of like, what is going on?
02:20So I think the thing is, we've used viral before, but 10 million is a different level of viral than
02:26anything we've done. And I'm sure for you, you're like, really, that's what goes viral? Not my
02:30economic work? Listen, no. Economics done right is boring. Economics work should never go viral
02:38because it literally is not the most exciting thing. Doom porn goes viral, right? And of course,
02:44anything with the entertainment industry should go viral. But sometimes even the chart daddy can
02:52crack the code. And it's been a lot of fun. And it was so much fun to watch. I was, of course,
02:59I was in Scotland last week and over the weekend, and I was like, just watching it going, what is
03:03going on? This is crazy. So very fun. But let's talk about the tracker because that was a great
03:09article that you published. And the whole point of it was looking towards what are the signals for the
03:152026 housing market? So let's start with that. And let's start with the forward looking data.
03:20So of course, one of the things I've tried to emphasize this year is that anytime we have a holiday
03:25week for two weeks, just kind of take things with a grain of salt, because you could get some
03:31really wild moves on the weekly stuff. And some people might make a little bit too much of it on
03:36the up and downside. So I've taken some opportunities to write the tracker a little bit different around
03:41holidays. But this one was trying to get people to focus for the month of December, even though
03:47December is seasonally a very slow period in terms of inventory starts to fall, new listings data starts
03:54to fall, weekly pending sales, total pending, everything kinds of winds itself down, and then
03:58we start back up again. Of course, there's seasonally just the numbers, and then there's the weeklies.
04:03But you can get a glimpse into early 2026, because the backdrop we have now toward the end of 2025
04:13isn't the same backdrop that we had in 2024, or the same in 2023. It is a more healthier backdrop.
04:25But very similar to some things that were at the end of 2022. And the reason I bring the end of 2022
04:30for all of you remember, 2022 had the fastest crash in home sales in history. Like when you look at the
04:36peak in housing demand in 2005, it took all the way down to 2008 to get to the level. We went,
04:43waterfall dive aggressively. And back then when purchase application data, the forward looking
04:50was like getting so low that it looked to me that we were going to get to 4 million.
04:55And the reason I always bring 4 million up all the times for over a decade now is that it's really
05:00rare to have existing home sales after 1996 go below 4 million in any big fashion. We've had some
05:07monthly prints go below 4 million, but total existing home sales have not closed really below 4 million.
05:13So if that's the case, then the supply demand equilibrium changes. And I, you know, we put
05:20our 2023 podcast trying to explain that like a tutorial trying to teach people forward looking
05:25data. But this year, what do we know? Number one, rates never went back up to 7% like they did last
05:32year. We have the best forward looking demand in terms of purchase application. Now purchase application
05:38data looks 30 to 90 days apt. But if you have positive week to week data and positive year
05:44over year data, and its rates are near 6%, the start of 2026 is running off of a positive demand curve.
05:53We've never been able to have something with duration for an entire year or even half a year.
06:02We've had periods where we've had, you know, 12 positive weekly datas in late 2022 to early 2023.
06:09We had 12 weeks of positive weekly data. It gave us one of the biggest home sales prints in history,
06:14almost 500,000 in February of 2023. But in the past, we just haven't been able to get that 12 weeks.
06:21Last year, we were able to get the week to week data at least 12 weeks. I think it was 12 positive
06:28weeks, five negative, one flat. That gave us a couple hundred thousand home sales. But then rates
06:33shot up right up to 7% again. So that kills that. Now, it isn't the case. And we can maybe look in the
06:40entire month of December to give us an idea of what's going into 2026.
06:44So when you say we never had this in the past or we haven't, you mean since COVID?
06:48Oh, since the crash after 2022, right? You run all housing economic models after the biggest home sale
06:55crash ever, because then you can talk about the supply and demand equilibrium better.
07:00This is why we always tell people, if you're ever going to listen to a housing expert, get their forecasts
07:07for five years, then get their working models. Make them show you their working models tied to their forecast
07:13to see if they're worth anything. And another thing over the weekend is a lot of people are getting that
07:18some of the doomers are not real housing announced. They're entertainers, but not real housing announced.
07:23So this way, at least the tracker was designed to teach people how to read data looking out with
07:29current. Now, I think it's a unique time because we're still near 6%. The 10-year yield is up
07:35this morning. I think we're about 6.3%. Can we just hold this going into the year? And then
07:43what happens in 2076? We'll deal with that in January and February. But it is a very healthy
07:50backdrop because price growth is slowing down. Inventory's up. It's no longer the savagely
07:55unhealthy housing market. Buyers are in the mix. These are things, this is why I love 2025. 2025 is
08:01by far my most favorite year in housing post-COVID because it finally created that equilibrium balance
08:09that we've always wanted to achieve and that we thought we could achieve as long as rates went high
08:14enough and some time went by and you get that balance out there.
08:19So the yearly numbers on the tracker for the purchase application data have been incredible.
08:26But what you're pointing out here is that we got not only the year over year because of the comps
08:31were so crazy from last year, but the week over week. And that's the growth that you're pretty excited
08:36about. If we can get positive week-to-week data, like I was shocked that we had 20% year-over-year
08:43growth in purchase apps last week because we had a harder comp. I understand getting it from
08:48extreme low levels and we just don't care about percentage of increase, but that wasn't the case
08:53last week. Last week, the comps were much more difficult. So if we can get positive week-to-week
08:59data in purchase apps and some year-over-year growth, considering how low home sales are,
09:04we can have a growth year. So we have 10 positive weeks in the last 17 put together. If we can just
09:13keep that going into December and then roll into the spring, then you got something workable.
09:19It's just in the past three years, we've never been able to get that traction because the 10-year
09:23yield shoots up and mortgage rates get above 7%. But on that factor base, it's a little bit different
09:29now. The Fed has already cut 1.5%. They're going to cut another time in December.
09:34The spreads are much better now than they were in 2023. So the curve of mortgage rates
09:40are less volatile and they're lower. And we always said the data gets better when it's 6.64 down
09:48towards 6. If you just hold it down here with some durations, you have something to work with
09:55because we've seen glimpses of that. But we always have rates to shoot right back up higher.
09:59That is a huge difference between this year and last year, right? It's like we are holding steady
10:05on that. Okay. So you talk about the fact that we all know the Fed should cut rates. That doesn't
10:12necessarily mean we're going to have lower mortgage rates.
10:16No, it's one of the things about when I do my yearly forecast, 10-year yield, 470 is the top. So when we get
10:24up here, I say there's a lot of room to go down. But when we get down to the bottom at 380 and really
10:294% here, technically speaking on the chart on an upward trend, 4% is a very hard level to break.
10:35So I've got to hold my ground here unless two things happen. Jobless claims break. If jobless claims
10:42break, that thing's all over it. The whole modestly restrictive stance goes away. Or the Fed comes out,
10:48let's say I'm Jerome Powell in the next Fed meeting. We believe that we've been too restrictive with
10:57policy. The sectors of the economy that are showing softness and weakness are now starting to show
11:02some deterioration in their labor markets. So we would like to get to neutral policy as soon as
11:08possible. And we do not want to have modestly restrictive policy anymore. If he said that,
11:15that's a change. But whenever mortgage rates get down to 6%, I mean, I keep on telling people that
11:21they do not like this. And it's been years. It isn't by accident that all of a sudden you've got
11:28this humongous wave of hawks coming out here and trying to push back on rate cuts. They want to stay
11:35as modestly restrictive as possible until jobless claims breaks. Jobless claims breaks, they can't
11:41really hide behind anything because that's the layoffs. That's the discharge. I've always said that
11:45when layoffs start to happen and claims break, every economic cycle post-World War II goes into
11:50recession. So we've always used that as the key metrics since 2022. Unless jobless claims head
11:56toward 323,000, four-week moving average do not go into the recession talk. So now it's just a little
12:02bit different because policy is not as restrictive as it used to be. The labor data is softer. Without the
12:08labor data getting softer, the 10-year yield is much higher than where we are today. But for now,
12:15it's somewhat still intact. And the month of December will be very interesting because we
12:21might not have tariffs anymore. We might have a Fed that says it might be trying to get to neutral.
12:28There's all these things that are in play in the month of December that we head toward the time
12:33where Powell's replacement will be talked about or announced. And then we get ready for 2026. And
12:39when the forecast comes, remember, forecasts are useless without a model. We want to incorporate
12:45everything that we know from the month of December and then go with it for 2026.
12:50Okay. So we had Black Friday. And do you feel like we found out anything by looking at Black Friday
12:56numbers about overall economy, what we're looking at?
13:00So we haven't had retail sales, you know, during the government shutdown. And the last retail sales
13:06was a little bit stale. But Black Friday's shopping was good on a year-over-year basis. But if you
13:14break some things down, it looks like less things were purchased. They're just at higher prices.
13:20So there are people that say it was very positive. It's good. People are consuming goods. It's good.
13:24There you go. And then there's people like, look, there's less. Whatever it is, retail sales are up.
13:30Ten-year yield went up today. There's some Japanese bond market drama early on this morning.
13:36But Powell is going to be talking today. He shouldn't say anything about the economy while he's in
13:41Stanford, but people are just mindful. When we get down here to this 4%, there's a reason why it's
13:47hard to break this under. It's because policy is still modestly restrictive and the labor market
13:52hasn't broken yet. That's really good. Okay. Let's talk about some of the other
13:56signals for 2026. You said, you know, we have some positive headwinds.
14:01Wait, tailwinds. I mean, to me, the inventory story is such a good thing. Like, you cannot have
14:10home prices go up double digits every single year. You know, it was already damaging. Like,
14:15the unhealthy housing market started mid-2020, not because home prices were collapsing.
14:21And sales was that once we were alive and people started buying homes again, that was fine. But
14:28the supply and demand equilibrium, the housing inflation was just about to take off. You remember
14:34like the media tour we did early 2021 was going on Bloomberg all the time saying, man, we need
14:40higher rates. The home prices are going. So you could say all these things, but then everyone was
14:45stuck with forbearance, forbearance. Home prices are going to crash at 20. It's just like, whatever.
14:50In any case, the fact that we are here, price growth is slowing down. Wages are picking up.
14:56That is truly another awesome story for 2025 that we finally got to a level to where I no longer can
15:04say, you know, we have a shortage or inventory is too low because I'm doing what I did in the last
15:10decade. When you get 1.52 to 1.93 total active listings, you're fine, right? You know, it's a
15:17workable market. And now it's a workable market. It took a little bit longer than I thought it would,
15:22but still positive on that front. And as you said, that impacts home prices. Where are we on home
15:29prices? Home price growth is slowing down and everybody should be jumping for joy, right? All these
15:35forecasts for all these people for many, many years, right? We had one of the doomers completely lose
15:42it over the weekend because, you know, the dude had the biggest home price crash post-World War II
15:47tied with 2008 and it didn't work out. Look what's happened. We've ran the three-year gambit.
15:54Home inventory didn't explode. Distress sales aren't here. We don't have underwater mortgages. Price
15:58growth slowing down should be a positive view, right? That is a positive. The buyers are back.
16:05The sellers have no control. Remember the statements that I was giving in the second half of 2022 to the
16:12media? Like I was like, we need higher rates to put home sellers, builders, and investors on their
16:19bleeps, right? Because that is not a healthy market. So what's happening this year has to be viewed on a
16:26positive light. I know one of my colleagues likes to say that the Fed is too restrictive. We have to
16:33cut rates because home prices are falling and they're using a price per square foot and it looks
16:37like, you know, home prices are down below 20, below 20. It's like, no, that's not how it works.
16:42I understand what he's trying to do. He's trying to get the Fed to cut rates more aggressively. But
16:45if you really had authentically national home prices below 2024 levels in a notice way,
16:52NAR, Redfin, Freddie Mac, Case Shiller, all these indexes would show it. We're just not there. Price
16:58growth is slowing. You know, the Fed should not look at that as a thing. And it's a positive light.
17:04This is why I'm not for 50-year mortgages. The portable mortgage is not going to work because
17:08you can't go back and get those contracts. The 30-year fix is fine. Let the market kind of work
17:12itself out, right? Give it time. Inventory up is good. Buyers are going to go there. They don't have
17:18to worry about. They can get seller concessions. There's all these things that are good. And y'all
17:22are just like trying to ruin it by saying... And also, ARM loans, right? I mean, you brought that
17:28up in the tracker again. Yeah. I mean, 2026 will be the first year in many years that people will
17:33have access to ARM loans. You know, these aren't the ARM loans of the previous ticket. My God,
17:38people are just... We see these crazy headlines. Oh my God, a product from the 2008. Read a book.
17:44Read a book. Don't burn it. Read it. None of these arms look like the arms of the past. Those
17:51things were all limited after qualified mortgage, right? There's no 228s, 327s, 100%. All that stuff's
17:58gone, right? So the ARM loans will never be as popular as they were. But ARM loans are picking
18:04up because it's a sub... I mean, it is what it is. But when rates get below sub 6%, the builders are at
18:102019 sale levels, right? Because why they're doing rate buy downs. And why is that important? Because
18:18if they didn't do that, new home sales would be worse and housing permits would be worse and starts
18:23would even be worse. So I'm all for that because, you know, you want to... You have to make sure that
18:28you're still building homes to a degree. But in this case, we've seen ARMS pick up when rates are
18:35falling. You don't usually see that with the ARM data. We usually see ARMS pick up when rates are
18:41rising. That makes sense. But there's just something about the sub 6% mortgage market that
18:47gets things going. Yeah. No. I mean, people feel like they need to pull the trigger then. That's
18:53absolutely true. Yeah. And again, the biggest Christmas hug, the biggest Christmas kiss, you know,
19:02if you see a mortgage spread, go there and get a mistletoe over it, right? And, you know,
19:09without mortgage spreads improving this year, we would have not had this discussion.
19:14And we have a little bit more to go. There is some more improvement we could see in mortgage spreads.
19:17We should get near the normal levels next year. It has nothing to do with quantitative tidying,
19:24ending, or anything. Look at all... I know I got that question a lot over the weekend.
19:27Does QT ending help the spreads? We have made a major move on mortgage spreads already. We got
19:34down to as low as 2.12%, 2.12%. Like the upper end range of normal in the recent decades, I know way
19:42back, you know, it was low 1% and under, was 180. So we're only... At one point, we're only 32 basis
19:49points away from normal. So we can get there next year. Volatility compresses. Fed rate cut cycle goes.
19:55As long as we don't have any kind of drama or anything like that, we should get there. And
20:00we've made good improvements from that side. So that's a positive. As long as that sticks,
20:05that's another benefit going... You see all these things, we all put them into the tracker this week
20:10to kind of keep an eye on head and go out into 2026. There's a lot of different variables now that
20:15are positive. You just have to look at them in the totality of all the data put together.
20:21And we have made it easy for people to find the Housing Market Tracker. It's housingmarter.com,
20:26Housing Market Tracker. Go find it. They're all there listed together. They're on the Housing Market
20:30page. You have all of the charts that you use there on that same page. People can see the most
20:35updated. So we know that it's a resource that people really use and like. So we made it easy.
20:42Yes. And also remember, the tracker is designed with national economics, with national data.
20:47You can get your own zip code, right? Wall Street comes to us. Real estate investors come to us.
20:54Prolific realtors come to us. Why? Because your local market is different than the national data.
20:58The national economic story rolls into whatever usually what happens into regionals. But
21:05that's the advantage. And we think we give to readers out there and the disadvantage of those
21:12who don't actually have a working model and don't show anything. And their forecasts have been wrong
21:17for five, six, seven years. And they just, you know, are doing it for entertainment purposes. We
21:22are data miners. We love numbers. Why Sarah Wheeler? Because numbers are the closest things to the
21:30handwriting of God. And we always want to be the detective, not the trawl. And all American bears have
21:37failed since 1790. But gosh, wait, you have to say something about the Peloponnesian War at this
21:42point. I mean, listen, listen, there's one group of people that have been wrong about America since
21:48the Peloponnesian War. But that was, you know, I love that statement, because it's so funny,
21:52obviously, from a history standpoint. Okay, well, we are out of time. Logan, thank you so much for being
21:57on. Thank you again for doing a great job on the tracker. And we will talk again soon.
22:02Pleasure.
22:07God bless you.
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