The BlackRock housing lie gets worse

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about the latest Blackrock hysteria, a three-year high in home demand, and the upcoming Fed meeting.   Related to this episode:   Mortgage purchase applications near 3-year high as spreads improve  https://www.housingwire.com/articles/mortgage-spreads-boost-demand/  HousingWire Youtube  https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q  More info about HousingWire  https://lnk.bio/housingwire   To learn more about Trust & Will go to 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.

Transcript

00:00Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about the latest BlackRock

00:12hysteria, a three-year high in home demand, and the Fed meeting. First, I want to thank our

00:17sponsor, Trust in Will, for making this episode possible. Logan, welcome back to the podcast.

00:22It's lovely to be here in sunny Orange County, California. Wow, man. I was telling you,

00:30when I was coming back from Indiana, I had to stop in Chicago, and while I was walking in the

00:35corridors to go to the airplane, I'm just breathing cold air. You can see your breath, right? Yeah,

00:40and while I'm sitting in my seat, I'm still breathing cold air. I was like, oh, get me home.

00:45Get me back to the 70 degrees, man. Okay, well, you're back to the 70 degrees and back

00:51to the amazing conspiracy that just will not die, that BlackRock is buying up all the homes,

00:57selling them for super high to the jack up prices of neighborhoods. It sort of exploded over the

01:03weekend or maybe end of last week because a politician, you know, said we, you know, addressed

01:09it and said, we need to do something about this. Maybe you can bring us up to speed here.

01:13Just when you don't think the bat bleep thing gets worse, it got really crazy this weekend.

01:21So, of course, I don't really watch TV outside of football, by the way. NFL and college football

01:26has been great this year. In any case, people were sending me this meme that BlackRock bought

01:3450,000 homes, which in a sense, the entire lie is already broken there from the first one,

01:40but they bought their homes for 350,000. Like then overnight, they sold them for 700,000.

01:46And that's why home values are up, you know, post COVID. And like, and I sat there, I'm like,

01:53no, that's not how it works. I mean, that's, that's, I mean, they took it to a crazy level.

02:02Imagine the person who made that thinking, my God, Americans are going to be so dumb that they're

02:06going to believe this. So I was like, okay, so I, I, I, what I do is I take these pictures of it and I

02:13just rip it on social media and made a video on Instagram. But then I saw that a politician went

02:21on CNN and said, well, we are BlackRock owns all the single family homes in America and they're,

02:29you know, jacking up prices. So we're trying to ban them. I think there's, there's some law

02:33to try to ban them from. So then I put that video on top of that. And I, you know, it's basically

02:39just reading, man. First of all, it's again, Blackstone. Okay. I can maybe, I can maybe slightly

02:45forgive people, Blackstone, BlackRock, The Rock and the Stone, Sharon Stone versus The Rock in a battle.

02:51Who's going to win that? Whatever. Okay. Whatever. Right. We can, we can, we can maybe do with that.

02:56But to now make that the post COVID highs in prices was an overnight purchase and then overnight

03:05sale. Like you, you're going into like, not, I mean, the Russians were really good at disinformation

03:11and class warfare campaigns in the last decade, you know, but this, I mean, this goes into some

03:18crazy land that you don't even, you can't even comprehend. You think it's a joke, but then yeah,

03:23this, this is happening. So we, we have to shoot this down because there, for those that see me on

03:31the narratory, I always do this joke. You know, how many people said BlackRock buy all they buy zero

03:36homes and the aggregate data, the biggest home buyer in America is usually the biggest driver

03:42of supply and demand equilibrium. And that was those pesky millennials. They were the ones,

03:48you know, why don't we ban them? You know, and, uh, they don't even offer you a house like a Gen X

03:55person and a baby boomer actually puts a house on the market. They sell and they buy it. But these,

04:00these criminals, you know, I have never seen a social media reaction to that post like yesterday

04:07where people were like, thank you, Logan for pointing this out. Oh my gosh. So glad you said it.

04:12So glad you're busting this because, and then what, like that post got like a million views

04:17on Twitter, because I, I, I retweeted the politician who went on CNN and said BlackRock

04:22owns all the, you know, single family. It's just, it's a false narrative that feeds into other

04:27false narratives. And it's like the reason, first of all, how could any entity buy a bunch of homes

04:33and then the next day sell it for double? Do they, do they own all the sellers?

04:37So the, the funny part is, uh, you know, I've dealt with troll camps. You know, when, when you

04:43deal with the Russians and the Chinese, you just know how to go after these people. Like a lot of

04:46people, they just flood you with stuff and then they think you'll just, no, you just go straight

04:50at them. I encourage everyone go to the YouTube channel of ours, where we challenge people to live

04:54debates and all those men run away like cowards. But here one gentleman said, Oh, BlackRock bought,

05:01you know, X 5,000 homes in this state. And I was like, let's all take a calculator.

05:05There's near 5 million homes bought every single year. Everyone take your calculator and just do

05:12the math there and tell me that's the biggest variable in supply to many good, uh, economics

05:17and housing. So it's just, and, and part of this is BlackRock is like a humongous, massive,

05:24you know, uh, uh, financial institution, like three, $4 trillion they manage. Blackstone is like

05:30this little tiny thing. So you can't say it's Blackstone cause they're so small, but

05:34some of the narrative has been, well, one day when wall street is going to be in trouble,

05:39they're all going to once again, rush to sell all the homes, you know, and you dumb homeowners

05:46and buyers are left with a bag at home prices, you know? So, so what, what would this country be

05:53if I wasn't here? Who would regulate this stuff in this kind of manner? Cause no one else is really

05:58doing it, you know, uh, in the academic world, you know, there should be other economists and

06:02everything just like, you know, pounding the fist on this. Uh, but yeah, it's just this, this,

06:08this, that went to another crazy level that I did not think was even possible. But again,

06:13the other thing is they own those homes. They're renting those homes. Why would they sell those

06:19homes? They're obviously making money on those homes or they wouldn't be doing that, but they're not

06:23going to wholesale sell all of their portfolio of homes. Here, here's the thing. A lot of people

06:28say, why don't we just ban all investors? Like, you know, you get these like delusional men online

06:35who say, let's just ban all investors. Let's just flood the market with all these, uh, rental homes.

06:41And then I, and then people go, Logan, why don't they just give tax breaks to investors to do this?

06:46Okay. Number one, you're giving tax breaks to investors, right? In this political climate or

06:51any political climate, do you think that's like feasible? Number two, what do you do with the

06:58family members that live there? That is where people start to go. Well, I never thought about

07:03that. Right. Why didn't you think about that? You know, how, what do you think these homes are

07:08empty? These people just buy the homes and they sit there and nothing, nothing, nothing's in there.

07:13They just hold those, you know, no. So, um, you kick out American families and then you reduce the

07:20rental supply in those areas. And then rent inflation goes higher because whatever is left,

07:26those landlords are going, Oh boy, I can charge a lot more because I have X amount of people coming

07:34in and guess what? They can't do anything about, they have to rent CPI inflation goes up, you know?

07:40So then imagine the politician who has now tons of people who are now don't have a home, not home

07:47buyers. And there's a few rental supplies and now they're bidding up rents. That's not a good look.

07:52That's why it doesn't happen, right? Because the, the optics of kicking people out of this,

07:57out of their homes. And then all of a sudden the rents go up and then inflation goes up and you have

08:02no mechanism to bring supply in. Cause guess what? Where are housing permits, Sarah? They're at

08:09recession levels. We were told we're going to build millions and millions of homes because, you know,

08:14we, we, we, we, we have to create more supply. We are at recessionary levels of permits and starts.

08:21That's why we wrote that in June of 2021. When rates go up and demand fades, production will fall

08:27like it always has. And it has here. So the whole optics around this economic stuff is just not

08:33feasible for some people to like think for more than three seconds. So, but if you say BlackRock,

08:39if you say they own all the homes, they're the villains, the affordability issues that we have

08:44in this country is because of them. Class warfare. They have all the money. At some point, we're going to

08:52unite all the housing conspiracies together and it's going to be BlackRock has decided to sell their

08:58Airbnb homes, you know, to like the silver tsunami. I don't know. We're going to have to have like it

09:03all in one. There is always going to be people like this. And we, and again, like we've, we've always

09:09said that, you know, our tracker data is very prolific and trying to give people a heads up. And we saw

09:15another home price data report that said pricing is firmed up. And we talked about, Hey, things changed

09:21six months ago, things changed late 2022 things change mid 2024. If we ever saw a rush of sellers

09:29will be the first one to know, because I don't do anything on a Friday night and just look at the

09:34tracker data and look at the data. I will let, if I saw a vertical, uh, new listings data, and we are

09:40here at the end of 2025. And like we said, the people that read the people that believe in reading

09:46have an advantage because none of that new listing stuff ever happened. Like it

09:51was, we never even got back to the normal 80 to a hundred thousand that we would see from 2013 to

09:5719. Right. So again, people live in these homes, right. You know, uh, uh, American citizens have

10:03property rights. What they want to do with their house is their business. You know, you can make

10:07laws that, you know, there, there are cities that have banned Airbnbs, but you know, this is not like

10:12hoarding empty homes, you know, and sitting there and there's, you know, they paid a lot of money.

10:18They're just, no. So in a general use, you know, some people use it to short-term rentals. Then

10:23they, sometimes they take that short term, make a long-term rentals. And then there are people who

10:27are living in, in these homes. So the whole thing got out of, out of control. But for this story,

10:32I think because affordability is becoming more of a political issue, especially the midterms are coming

10:37up. They're just throwing everything they can. And then you have to find a villain. If you do not have a

10:42villain, you know, how can you create that rage? And it's really hard to make it mom and pops.

10:48Like they own like 90% of the rentals units. They provide shelter, you know, out here. So

10:52that's the, this one just, uh, I, I didn't, I thought this was kind of dying down, but it just,

10:58it went to a nuclear level of craziness that, that I haven't seen in a very long time.

11:03Well, I'm excited. I I'm thankful that you take on the trolls on this because, and I saw so many,

11:09uh, messages of support, like, thank God someone's saying this. So let's turn to the tracker,

11:14right? Um, because we had a really interesting, uh, tracker this week, December demand at almost a

11:21three-year high. So let's talk about that. So how we, how I do the tracker is a little bit

11:26different than everyone because I, I work everything off the 10-year yield. I do not believe in mortgage

11:30rate targeting. I think that's an inefficient way to do economics. If you just do the quarterly

11:36mortgage, where you think that is, I believe in daily, weekly, cause we take all the economic

11:40variables in there together. And the reason housing data got better recently is because

11:45the labor market got softer. If the labor market didn't get softer, fed policy means rates need to

11:51be higher, right? So when the curve of the 10-year yield went lower, mortgage rates went lower. We have

11:57a working theory that the housing demand gets better from 6.64 to 6. If that wasn't the case in

12:03the last three years, I wouldn't be talking about it. But now, now that we're toward the end of

12:08December, our total pending sales data is at a multi-year high. Purchase application data itself

12:13is near a three-year high. Uh, early 2023, when mortgage rates got down toward 5.99%, that picked up

12:21a little bit more there. So all these things are working in an equilibrium to tell you what's

12:27happening in the market today. So months from now, when you see in the sales data, you won't be

12:33shocked. And that's why we, that's why we believe the tracker is prolific because it takes many

12:38variable datas out here. I know a lot of people just look at inventory, but don't talk about demand.

12:43I know a lot of people look at the demand, but not the inventory. We have price cut percentages,

12:47weekly pending sales, total pending sales, purchase application, 10-year yield, mortgage spreads,

12:52hug a mortgage spreads, give a mortgage spread, an extra Christmas present, or whatever it is.

12:57But the article really showed how important mortgage spreads were. It was flawlessly beautiful

13:03in that. It was like one of the more fun things I've ever written for HousingWire, where we didn't

13:07get the 10-year yield down to 360 this year, like last year. So we wouldn't even be near 6% mortgage

13:14rates today if it wasn't for mortgage spreads improving like they did. And they hit the peak

13:18improvement percentage for 2025. So the thing I love about the tracker the most is the way that

13:24you are pulling all the threads and pulling it together and explaining what it all means. You have

13:29all these different disparate data points. And I do believe you're the only one who's looking at all

13:35of these things and saying, this is what it means, which is what people need to know to run their

13:38business. It is a beautiful, lovely slow dance, but it takes the 10-year yield and mortgage rates

13:47and spreads and economics. I'm an economics person first, housing second. So everything I do,

13:53I revolve it around the bond market. So this is why we do channels with a 10-year yield and we try to

13:58find levels to where demand early in the year, housing demand held up better than it has in the past

14:04when rates were above 6.64. So that was a cue right there. People picked up on that. Then all

14:10of a sudden we get below that level. So again, it's like an enchilada. There's a lot of things here,

14:15but it's a fluid process. And once people learn this stuff, think of it, you don't have to listen

14:20to crazy people anymore. And it is really good that I think a lot of people have now have looked at

14:27these crazy doomers on YouTube and home price crashes and everything now that we're in December

14:31out here. They're entertainers, they're not analysts. And again, if you really, really wanted

14:38to know about housing economics, the tracker is to me the most prolific way of teaching people how it

14:44operates with live data today to look forward. And then we could show historical perspective and then

14:50everyone learns. Think about it, a country that reads and is educated and everything and they don't

14:55have to listen to fanatics, right? You know, in that sense.

14:58So let's talk about that near three-year high.

15:02I mean, it's a very simple model. We're working from the lowest levels of sales ever recorded in

15:07history. We had the fastest crash ever and we've gone pretty much nowhere.

15:11And that's in 2022.

15:13In 2022. And the belief back then in late 2022 was that our data is looking like we're heading

15:21toward 4 million. My entire housing economic story would absolutely break negative if I was

15:28wrong about that 4 million level. And for those who don't know, existing home sales typically do not

15:32trend below 4 million or crash below 4 million since 1996, right? This is why I've always talked

15:38about everything I've written in the last three years would be completely null avoid if home sales

15:44kept on crashing and going lower to 2 million, to 2.5 million. That wasn't the case. So the supply and

15:51demand equilibrium is working off. Okay. This group of people can afford homes. We are near 5 million

15:58total home sales. But when rates get down to here, the forward-looking demand gets better.

16:04We saw that late 2022. We saw that in mid 2024. And now we've seen that in 2025. But now it's picked up

16:11just a little bit more. And that's all it is. We're working from the lowest levels. And this is why

16:17constantly said, it doesn't take much to move the needle, but you got a three-year high. And then

16:22if rates stay near 6% for an entire year, we have never tested that. All we have are these 12-week

16:32periods. And then all of a sudden, rates go back up to 7%. So the manna curve fades out. But every year

16:40that goes on, wages grow. Every year that goes by, households are formed. Dual household incomes are

16:46there. Dual household incomes. If you work any single affordability index model, it's perfectly

16:52fine to still buy homes. This is why we have near 5 million total home sales today. Last year, 2023,

16:59the peak in the last decade was near 6. Home builders, new home sales are at 2019 sales level still.

17:05Right? Why? Sub-6% mortgage market world. So there's things you can work with. And then it starts

17:11to make a little bit more sense out there. But all it is, is now we have 18 weeks of rates under

17:176.64. Demand curve picked up a little bit. It'll be a couple hundred thousand more home sales from the

17:22monthly sales lows that we had in existing home sales. And we go with that right now.

17:27Okay. You talked about mortgage rates. If we could just get them, you know, to stay stable for a year,

17:33we've got a Fed meeting this week. We talked about it in our last podcast. Tell me what you're

17:38thinking Fedweek. Again, under Jerome Powell, Neil Kashkari, Beth Hammock, Lori Logan, Austin Goolsbee,

17:47and a host of others, it is unacceptable to have mortgage rates near 6% because people will have

17:54sex. They will buy homes. They will buy more stuff. And it is not shocking that they get hawkish right

18:01here because Neil Kashkari told everyone in America in 2023 that how are we supposed to balance an economy

18:08if housing shows a little bit of life, you know? So if he is saying that on national television,

18:15what do you think they're thinking in the, in the back? There is a reason why they don't say

18:21anything about housing, right? If you have anybody all to say they're weak, housing's weak, housing's

18:26weak. They don't say we, they, they cannot make policy around the existing home sales market,

18:32right? The labor data and inflation is what they run off of. But my God, if, if, if housing picks up,

18:39what are they supposed to do, right? People will buy more stuff. And the fear, I mean, again, in the

18:45last decade, we had three and a quarter to 5% mortgage rates. We never had inflation breakout.

18:51We never had home prices escalate out of control with rates level because inventory was higher. So

18:56the curve is a little bit different now. If they understood that on inventory data, that you don't

19:02have to be afraid of near 6% mortgage rates, right? Near 6%. We're not talking three. We're not talking

19:08four. We're not even talking five, but you don't have to be afraid. You can live your life. You don't

19:13have to be so paranoid about, uh, uh, that out there. Okay. Well, fingers crossed. We are all hoping for

19:20that, uh, sustain near 6%, uh, just to help out our industry and help out homeowners. This is an

19:26affordability issue, right? So it is, it's just the, the, one of the mindsets is, uh, you know, for

19:32example, uh, when, when you think about purchase application data being near a three year high at

19:40this point, we have to be mindful that literally we are working from the lowest levels ever in the 1990s,

19:47when I was a high school basketball coach and I had blonde hair and you know, I was auditioning for

19:53commercials out there. Crazy pre pre chart. Logan was different. The percentage increase from these

19:59low levels. Is it a lot? Now I know some people go, we're back to 2014 levels. It's a 2014 levels

20:04were like 21st century lows anyway. So just take the purchase application data and context that it's just

20:10a trend survey, right? If we were near 250 or 300, where that index was before COVID, then you get

20:17back up to like 5 million existing home sales and it's a lot different. The builders, the new home

20:23sales sector, their purchase application data is near COVID, uh, uh, highs as well. Cause they're

20:28back at, they're still at 2019 level. So if you demand picks up a little bit, it's not going to be

20:33this home prices are rising 15, 20%. Oh my God. People have to like relax with that craziness out

20:40there. Uh, inventory is up. Price growth is cooled down. Uh, it is a very, very healthy market in this

20:47atmosphere. You don't have to panic if rates are near 6%. I think this should be your new motto to

20:53the world. Relax with that craziness out there. The world can't, the world can't operate in this

21:01day and age without being crazy. I mean, clearly, clearly we just saw that last week. I mean, I,

21:06I don't for, for me to have like a million views on Twitter, on a, on a video, like I, that's just not

21:12my thing. I don't do porn out there, but it's just, we're in a, we're in a, we're, we're in a

21:16civilization that you can literally lie and get the most attention and get rewarded for lying about

21:24stuff, right? The old mages that we used to be back in the dungeons with candles and reading scrolls.

21:30Now we have to go on Tik TOK and dance and do like stuff like this. So, so, you know, I, I don't

21:35really have to kind of understand this world. I just have to be able to operate in it and try to

21:40disseminate real information for people. Well, we appreciate you doing that for us. We will be

21:46watching the Fed meeting, of course, very closely. Logan, thank you for being on. We'll talk to you

21:50again soon. Pleasure.

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