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On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about how the headlines on foreign and domestic issues are affecting mortgage rates.
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To learn more about Trust & Will visit 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:
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 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
00:09Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about how
00:14the headlines on foreign and domestic issues are affecting mortgage rates. Before we jump
00:19in, I want to thank our sponsor, Trust & Will, for making this episode possible. Logan, welcome
00:24back to the podcast. A very eventful morning. Well, the theme that we always said, the year
00:32was going to be like the show 24. Yesterday, we had on the verge of war with Iran. There's
00:39Mexican cartel fighting. There's going to be a huge snowstorm in New York. The tariffs
00:46are going to 15% now unilaterally. I was just like, I'm bringing my Jack Bauer glasses out
00:54yesterday and going, all right, let's talk about economics. Then there was another big
00:58AI paper out there that the unemployment rate is going to go to 10% in 2028. It was one
01:07of those days where I thought about John Connor. Do you know who John Connor is?
01:13Absolutely. The Terminator.
01:15Well, I was just thinking when John Connor as a kid in the first Terminator movie said,
01:21hey, we're not going to make it, are we? I was realizing he was talking about the labor
01:24market. It wasn't about anything else. Listen, when it all comes down, Skynet, they're going
01:31to do these wealth taxes on Skynet. That's how we're going to survive this.
01:36Skynet's not going to love the wealth tax. Then people are going to attack the data centers.
01:40There's going to be all these robots with skull faces. We knew this was going to happen all
01:45the way back in the 1980s and 90s. Let's be careful what we do with Skynet.
01:51I know. This is so crazy. We are recording this on Monday morning. As of now, we don't
01:58have an invasion of Iran, but that could happen at any time. We have a lot going on. Pull
02:03back a little bit and say, what are the markets? How are they reacting to this? What is the 10
02:06-year
02:07yield?
02:07The last thing I saw was the 10-year yield was 406. It is really remarkable that also
02:15the Jon Hamm meme of me dancing in the club, the bond market mortgage rates are like, whatever.
02:24Christopher Waller came out this morning and talked about the March rate cut is a coin flip
02:30because he doesn't believe the labor market is recovering any. It doesn't really matter
02:35what Christopher Waller thinks. He's one of the few doves left, so it's got to be by committee.
02:42I don't believe there's any more rate cuts while Powell is in charge, but jobless claims is still
02:51historically low. There was a lot going on over the weekend. The tariffs went from unilaterally
02:5710% to 15%. The thing is that we're getting close to midterms. It's going to be hard to have
03:06a
03:06prolonged war with Iran and start doing maybe too aggressive tariffs going in. Like we've always
03:17talked about, it's hard here in America because we have two-year political cycles. You have to start
03:22putting in the midterm variable a little bit more every day that we get closer to that. And then
03:27once the midterm is over, if the Republicans lose one of the branches, you know, things get more
03:32difficult. But yeah, very, very Terminator 24 show weekend with all the news and headlines.
03:41I could use a little bit less drama in my life here.
03:45But at least the 10-year yield is not doing anything, you know?
03:48That is true. So when you think about the war with Iran, right? So that's, it's hard to know
03:53what that looks like. You know, we went into Venezuela. We wouldn't, I mean, that's like a
03:57military action, didn't really have anything to happen. Do you think that this, some action,
04:03military action in Iran, what does that mean for the 10-year?
04:07If there is anything, it would just be limited strikes. I don't think there's any
04:11prolonged, tractive war here.
04:13So you feel like, how does the market react to that?
04:15I mean, the oil prices have gone up a little bit, but if you look at the price of oil
04:19and
04:19you take away the highs of what happened after the Russian invasion of Ukraine, and you just
04:23draw a chart line all the way down, it has these moves up higher. It doesn't really break
04:29out higher. So I, I don't know. I, it just, it doesn't seem to me, Trump does these big
04:35shows with all these military aircrafts. He can do limited strikes out there. I don't think
04:40it's going to be like a full-on invasion needing 80, a hundred thousand troops down there. So
04:46they're probably going to deal something out in the next few weeks and then the market moves on.
04:52And, you know, of course, so this is going to go live on Tuesday morning. Then we have
04:56the state of the union, which we actually expect to have a lot of housing talk. We'll see. It might
05:01be, it might be overtaken by some of these other actions, but Tuesday night, right? We've got the
05:06state of the union. Yeah. You know, number one is there's going to be no more 50 year mortgage.
05:11So, you know, I'm, I'm happy about that. Um, again, anything to help with supply is a good
05:17thing. Anything where we can get production of housing. Good thing. I just think those things
05:22are like years out, you know, so we'll see if there's anything about, you know, maybe a short
05:30term, but if it's anything about production, it's going to take a while for that to, to have
05:36for sure, but it would be positive in that, in, in, in any light. Um, so it'll be interesting to
05:42see,
05:42uh, uh, what they do. You know, I know the white house and Pulte, whatever we do, our, uh, updates
05:48with the spreads, you know, where we talk about, well, mortgage rates would have been seven 20 in 2023,
05:54but now the spreads are here. We're at six Oh four. So, uh, uh, you know, I, they, they retweet
06:00that
06:00or show that, but in this case, the spreads kind of done their thing since the end of 2023. Uh,
06:07well,
06:08we'll see if there's any announcements on that, but I know, uh, our Trinity talk that you and I had
06:13was November 7th. I think, uh, the day after Trump won is the three things Trump needs for this to
06:19work
06:20as a lower dollar, lower energy price and lower mortgage rates. He, in a sense has the, has them
06:26all here and there's still, you know, concerns about affordability. So, uh, there's limits on
06:32how much lower oil prices or mortgage rates can go. You know, we talked about that in the last
06:37podcast that can you get 5.375 to 5.75? Uh, yes. And the 10 year yield went lower and
06:43spreads went
06:44lower. Uh, if the labor data got weaker, stuff like that, but fed policy is, is, is set on just
06:50only going to neutral right now. Um, and there's all this talk about, you know, maybe can, what can
06:56Warsh really do if they try to cut the balance sheet? That to me is, will be a little bit
07:01more
07:01interesting going out over the next few months. It's like, if they're really putting their weight
07:05on AIB disinflationary and, uh, cutting the balance sheet to maybe lower rates, I don't, that has to
07:13be brought upon in a clear message for the marketplace. But even Neil Kashkari of the
07:19Federal Reserve just basically came out and said, you know, cutting the balance sheet aggressively
07:23is just not a feasible thing in the current, uh, environment because they're just trying to
07:28back and forth with the banking system and the repo markets and all that stuff.
07:32You know, at, outside of the, um, you know, you mentioned we, we had big actions in, um, Mexico
07:38too, right? So we have those kinds of international things going on before those things. I would
07:43have said, you know, housing is going to be affordability and housing is going to be, uh,
07:47uh, I mean, part of the speech, but now, I mean, I don't know, it might get crowded out
07:50too, but otherwise I would think that there are some things they want to announce that
07:54are going to be like, Hey, you'll get announcement to get announcements and getting things done
07:59two different things. Um, it will, it will be, it will be interesting if there's anything
08:04on the builders, you know, I think, you know, the, the, the white house clearly wants the
08:08builders to build on this land and the builders are got, have you seen Logan's chart? Our
08:12completed units of sale are like at levels where we don't really push the, you know,
08:18pedal to the metal guys. So we'll see. Well, we'll, we'll have to take it one day at a time.
08:22There's, there's a lot of theories out there. I, I, I questioned some of them. Some of them
08:26make sense, but, uh, we'll wait to see any of the announcements.
08:31Yep. And everybody, uh, tune into, um, housingwire.com obviously we'll be covering the, um, uh, state
08:37of the union. We'll have a, uh, a story up shortly and we may be doing, um, right after
08:42it's, uh, concluded and we may be doing live tweeting. So that's what we normally do during
08:47these things. So we shall see. So keep up to date there. Okay. Logan, weekend tracker.
08:53Yes. Weekend tracker. Very positive. Um, uh, the weekly pending sales are back to the year
08:59over year growth. Uh, you know, two weeks ago we saw a good move on a week to week basis.
09:04We're like slightly below, uh, being flat for the year, but this week, this week we went
09:08back to the earlier trend. You could, you could really see the snow data melting away from the
09:14tracker, uh, in the sense that new listings data was, uh, uh, negative year over year and
09:20not really growing much in a normal situation. I would have been okay. That's not a healthy
09:24thing. Like what, whatever we think about housing, we never want 2023 again, like 2023 home prices
09:31were up 6% new listings data didn't go, uh, uh, out. Uh, the, the seasonal bottom and inventory
09:38happened in April. If mortgage rates didn't get to 8%, we would have had that growth, you
09:42know, toward the end of the year. But, uh, that was not a, that was not a conducive, uh,
09:48housing market, but here now that the snow data is fading away, new listings data picked
09:52up, weekly pending sales picked up, uh, the price cut percentage is now down, um, uh, year
09:57over year more than 1%. So I think it's, it is interesting that more people as they, as
10:02they read weekly data are starting to figure out like, why is the price price cut percentage
10:07of falling when, um, there's these big declines in sales guys, remember there's a holiday and
10:13then there's a snow factor. So, uh, you wouldn't have the growth rate of inventory really slow
10:18down from what we had before. If there was authentic, like selling, right? So the new listings
10:24data was actually being held back. I thought because of the snow and now that's back weekly
10:28pending sales is back. Spreads are, you know, on, on times when the 10 year yield goes down,
10:34the spread does go up. It keeps the volatility compressed, right? And that's why we're not
10:39getting much movement of mortgage rates. This is what typically happens again, very, very,
10:43uh, uh, positive for the housing market that rates are lower and stable, uh, in this environment
10:49because you can make better choices. You have more time to make choices on what you want
10:53to do when there's less volatility. And that wasn't the case a few years ago.
10:57I think it was interesting to see that those positive data lines, um, because obviously we
11:02had a really positive start to, well, a positive start to 2026. And then we got hit with the snow,
11:09got hit with different things. And now it's kind of like, we're like, okay, yeah, that trend is held.
11:13That's just, so just remember that, you know, we're going to have one more existing home sales
11:16report that has that impact. And again, I, I wasn't a weather person because to me, the, the holidays,
11:22which we've talked about for years, which we said people are going to make over a deal because they
11:26don't, they don't track this stuff holidays, but the snow impact does fade away very quickly.
11:31The New York thing is just going to be a day or two. That doesn't really matter to the national
11:35market, but in general terms, it was good. It was good in that sense. Mortgage rates are lower,
11:41spreads are lower, volatility is less inventories up, uh, even though the price cut percentage is down
11:47year over year, more than 1%. It's there's enough inventory to prevent prices from like having a
11:522023 year where they're up a 6%. It is a very, very healthier housing market. Last year, I smiled
11:59really big because I thought it was healthier this year. I'm smiling because if you want to try to get
12:03back to normal, these years have to occur because you're not going to get, you know, 3% mortgage
12:09rates anytime soon or anything like that. And you don't want to like, you know, root for a recession
12:14for that to bring rates lower for a longer period. So I thought a very, very healthy tracker. If you
12:19look
12:19at the data lines in context to what, what it was, and always remember when you do have the holiday
12:24lull, you get this sharp rebound in tracker data, which is just a rebound effect at the start of the
12:30year. But all those things were at multi-year highs, deal with the snow. And now new listings data, new
12:34listings data picking up was really good, uh, pending sales picking up really good. And then, uh, we just
12:40kind of go with that for the rest of the year, but it's just, it's just so much healthier now
12:44than what it
12:45was, uh, a few years ago. I also just think like, it's, it's amazing to me that we can have
12:50all these
12:50crazy headlines and it's like steady. She goes right. And, and that's what we need. We need less
12:55volatility and rates. We need the market to be stable. And I think, I don't know, maybe we're all
13:01just have like, it takes a lot to rattle things now because we've gone through quite a few crazy
13:07headlines. Well, 65 to 75% of where I believe the 10 year yield and 30 year mortgage rates could
13:12range
13:12is fed policy. So we have a lot of rate cuts in the system. We still have two more rate
13:16cuts
13:16technically priced in to the markets this year. Um, and then mortgage spreads did their thing.
13:22So it, it, it looks, it looks normal to me when I, when I always highlight volatility compressing is
13:28a good thing. You know, this is what happens and it's just, we're so used to the last few years,
13:33mortgage rates would be over to seven and a half percent, you know? And so we, we'd already,
13:37we'd already see that spike. And when that's what that spike does, it didn't crash.
13:42Sales anymore, but it didn't give it any, uh, kicked, uh, uh, leverage to go up higher in terms
13:47of demand. So we just have this back and forth that you just can't really operate when you have
13:51one rates up one rates. It's funny because in the last decade, one time in 2013, the 10 year yield
13:58went from 1.6 to 3%. The fed tapered discussion, but I thought the economic data was getting better
14:03than mortgage rates went from like three and a half to four and a half or something like that.
14:09And everyone was flipping out because rates went at 1%. And like the last few years, like,
14:15hold my beer, man, that was nothing. You know, you guys, you guys had it too good back then,
14:21you know? Uh, uh, but again, positive in the light. We'll take the tracker every single week.
14:26We'll look at every single economic data. We'll take all these crazy headlines. We'll try to make
14:30sense of it, but it's just like, it's interesting how everyone's like, man, there's not much volatility
14:35of mortgage rates, you know, or the 10 year yield. We're just basically down here. And I was like,
14:40this is what, this is what it looks like. Now, if jobless claims had been rising, you know,
14:45if we're heading up to 300,000 on job, then it's a whole different story because the 10 year yield
14:49be like, Oh, okay. It's finally happening, but not the case. You know, considering everything the
14:56housing market has gone through, this is as best as you could hope for with, uh, uh, with what's
15:01happening again. And part of this is there's a lot of people who are starting to think,
15:05you know, the AI jobs thing is going to be real. And, you know, over the next few years,
15:11it'd be very hard for rates to really accelerate higher if, if AI in theory was taking the jobs,
15:18but for now the unemployment rate is low. Jobless claims are low. Uh, the economy is still growing
15:24real final sales as a percent, you know, as part of the GDP is still growing. So we'll just take
15:29it
15:29from there one day at a time. This is why we're on four times a week. You won't let me
15:32be on five
15:33times a week. I say, I'm going to be on seven times a week, twice a day. Eventually Logan wins,
15:38you know, the Logan's run is keep on going and it's going to be a lot of fun with that
15:42app.
15:42Well, you know what? I really appreciate you being on four times a week. And especially today when we
15:46had, I mean, we were talking all weekend cause you know, of course you did the tracker,
15:49but it was also like headline, headline, headline, all this stuff going on. I was like,
15:52okay, what's going to happen? Like I said, you're my Chloe, you know?
15:58Okay. First of all, that's not really a compliment.
16:02What do you mean? Chloe is awesome.
16:03The thing Chloe had going for her.
16:05Chloe and the actress love my hair too. So that was, that was, that was a funny moment.
16:08The thing Chloe had going for her, I definitely don't, which is all her technical skills,
16:12right? Like she's the one that could like hack into stuff. Like, come on, that is not me.
16:16So Chloe eventually ended up running that little unit at the end of the thing. So there you go,
16:22you know, so props to you, you're, you're, you're, you're going to get a raise and a new title.
16:28I'm not sure. I'm not sure that I'm, I'm embracing Chloe on this. Jack power. Okay. I get it. I'll
16:32have
16:33to figure out somebody else anyway. Logan, thank you so much. And we will check in again very soon.
16:38Pleasure.
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