- 2 days ago
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about housing inventory, the Iran conflict and the latest data on the mortgage rate lockdown.
Related to this episode:
Is housing inventory about to turn negative year over year?
https://www.housingwire.com/articles/is-housing-inventory-about-to-turn-negative-year-over-year/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
To learn more about Total Expert visit totalexpert.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
Related to this episode:
Is housing inventory about to turn negative year over year?
https://www.housingwire.com/articles/is-housing-inventory-about-to-turn-negative-year-over-year/
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
To learn more about Total Expert visit totalexpert.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
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NewsTranscript
00:09Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about housing inventory
00:15and how he explains what's happening in 2026. Before we dive in, I want to thank our sponsor,
00:21Total Expert, for making this episode possible. Logan, welcome back to the podcast.
00:25It is wonderful to be here. It is National Blockade Day, where the U.S. is now blocking the Strait
00:32of Hormuz
00:33themselves. Of course, we didn't get a ceasefire agreement. Of course, something like this usually
00:42takes a lot longer. It took like 18 months to get the original Iran deal. That's not too shocking.
00:49But a different tactic. We are now created a blockade of ourselves. And watching people talk
00:58about how the economic impacts to Iran and forcing them to be a little bit more, maybe a more
01:04sophisticated way instead of trying to blow up everything, trying to get them to the table.
01:09And of course, if they don't escalate things, maybe we could get a deal out here. But oil prices went
01:15up
01:15Sunday night. 10-year yield went up just a little bit. 10-year yield is basically kind of doesn't
01:21break above 4.36 with all the crazy headline news and oil prices. But as the day progressed on last
01:29time, I saw oil prices were back under 100. The 10-year yield was down just a smidge. So
01:34as crazy as it sounds, the last few trading days for the 10-year yield has been relatively calm,
01:43unless we think there's like a deal about to happen where yields tend to fall down. So this is where
01:49we're at right now of the whole thing. And still to me, the bond market and oil prices to a
01:56degree
01:57feel like something can get done. It just gets harder to get things going. But the blockade is a very
02:05interesting tactic because really, you know, if you read people's work on this thing, they got about 17
02:10days, Iran does before they really get into like a financial stressful situation with their currency
02:16and lack of revenue and they need money, of course. So we'll see. This is just Monday morning. It's 24.
02:24And this is the kind of maybe the Jack Ryan financial analyst kind of approach to getting a deal done.
02:30But the beat goes on.
02:33Okay, wait. So Jack Ryan versus Jack Bauer. Now we've got two international shows going on.
02:39Well, Jack Ryan was a financial analyst, you know, insurance. Remember the show Alias?
02:45Oh, I guess I love Alias.
02:47Yeah. So everyone's like an insurance, you know. I always want to like have like an economics
02:52discussion with an agent who's supposed to be, you know, a financial person. I always think,
02:57do they really know what they're talking about? It would be really interesting. But
03:00in any case, that's where we are this morning. And last time I saw bond yields fell and oil prices
03:07were falling from the tube. So we'll take it one day at a time.
03:10You know, if you're in the housing industry, you've got to be like, you know, thankful that
03:14it seems like no matter what is happening there, it's not affecting mortgage rates very much.
03:20We are still within a pretty narrow range. And even when things go crazy and they mostly go crazy
03:25on the weekend. So maybe that's helpful. And then, you know, something is said right before
03:29the market's open that kind of calm things down. But you also feel like the market's just,
03:34they're not, they're not pricing in this risk.
03:37If you think about it, other players have more vested interests in getting the oil to get out.
03:44Of course, China does, Japan, Philippines, you know, there are places, Thailand, where they need oil
03:51and maybe they can pressure a deal. But also, if you take Iran's financial lifeline, you know,
03:58they're already kind of in a somewhat dire position already, you know, as long as they don't escalate.
04:04But I mean, you can't operate in a world economy. Eventually, people like get together and find a
04:11solution. So it doesn't seem like the US wants to prolong this in a, in a, in a, in a
04:20big protracted
04:21way or, you know, bringing troops in and occupying or stuff like that. I think it's just, it's,
04:26it's very confusing with some of the things Trump says one day, another, and what he says at 10 o
04:32'clock
04:32in the morning and five, you know, so, but I always, I'm, I'm a market guy. And to me, the
04:3710 year yield
04:38is like it, it, a couple of Fridays ago diverged from oil prices and oil prices are kind of saying,
04:45hey, let's, something is going to get done eventually. And we'll see, we'll see. I think
04:50oddly enough, this is one of the more positive Mondays, even though there wasn't a ceasefire that
04:55maybe there's a light at the end of the tunnel. And then we can just move on to the economic
04:59data.
05:00That would be very welcome. Okay. Speaking of economic data, Monday, we like to talk about
05:04what we saw in the tracker. And this week, you, this weekend you highlighted inventory and whether
05:10it was going to go negative. And actually we got a lot of traffic on this story. People are very
05:14interested in this. So of course, what are the things we've said? When did the housing market
05:19shift, Sarah? Mid-June. Okay. So mid-June. So if the forward-looking data improves and rates are
05:25lower, it's, we, we don't have like a lot of good recent history for inventory to escalate or really
05:32break up. So I think the, what, what happened this weekend is not only is Florida down inventory wise,
05:39but Dallas, like these are the two doom porn children of the corn, right? And this is basically
05:45supposed to be worse than 2008, by the way, the worst than 2008. All just precious babies, man. It was
05:52this beautiful watch. In any case, I think that's, I think, I think what's happening this year is the
05:57housing data is very confusing. And what we have said is that there's really not much going on.
06:03And I think, I don't know how many people know how, what to talk about, about housing when not
06:08much is going on. And I see these people on X and all these, they talk about, and they're just,
06:13they're just not housing people. They're not tracker people. And, and hopefully by now, by it's April of
06:202026, guys, if you haven't realized, there's only a few people in this country that authentically
06:26actually track housing data in a prolific way. It isn't the highest seller's market in the history
06:32of America. It isn't the lowest demand ever in the history of America. These things are not working
06:38in the, in the progression because what happened is active inventory didn't have much growth a week
06:45to week. New listings data is down year over year. I believe partly of that is Easter, right? We did
06:50a
06:50whole thing last year, trying to teach people that you have to be a little bit careful on our weekly
06:55tracker around holidays. Cause you know, you, you're not working at full force whenever you're not
07:00working at full force, the weekly data tend to get hit. So we'll wait until next weekend, but the
07:07growth rate of inventory is now down to 3.21%. Not shocking to us because we said the slope of
07:13the
07:13curve is going to run into harder comps and because they're running into harder comps and not much is
07:18going on, you're going to probably have some negative year over year. I think the, the confusing
07:23part is Florida and Dallas. I mean, this is, these are the birth children of, you know, doom porn and
07:30they're supposed to be escalating out of control and that didn't happen. So always remember that if you
07:37look at the history of housing data going back 84 years, 84 years is a really long time, Sarah, like,
07:45you know, that, that, that, and it's just really hard to get escalating inventory when you're almost
07:51back to normal. And this is why last year I loved, I love the housing market last year because inventory
07:57growth was good enough to get us back to normal. And the supply and demand equilibrium basically works
08:01with buyers versus sellers. There's no, it's no longer a savagely unhealthy housing market where
08:06inventory is too low. We have too many people chasing too few homes. 2023 was a good example.
08:11That was not a good year because home prices were up almost 6%. And you know, you don't gain any
08:17affordability benefits from that. But the last two years, wages of outpriced home price growth,
08:22inventories up, and we get back to this kind of boring equilibrium. And it's not the sexiest thing to
08:29talk about if your business model is to like, so here we are. And the tracker is designed to teach
08:35people. And I just, I just say Dallas and, and Florida were just two kind of highlighted areas
08:42that thought this would be the year where it just blows apart. And now they're both negative
08:47on a year over year basis. So one thing that you always say in the tracker is that at this
08:51time of
08:52year, especially you would like to see 80 to a hundred thousand new listings come on the market every
08:57week, right? Like that would be typical. We're below that. So do you think we're going to hit even 80?
09:04So we should still hit 80. I think the negative year over year, new listings data, and just remember
09:09our new listings data, these are homes that come onto the market that don't have a contract right
09:14away. Normal during the seasonal peak months, so about 80 to a hundred thousand. We really have not
09:20had normal post COVID. Even with 3% mortgage rates in 2021, where a lot of people think, well,
09:26there's going to be a surge of new listings. That's not how the new listings data works,
09:30right? If you have mortgage demand, first time home buyers come in, they take the homes out of
09:34the market. So new listings data doesn't have like the ability to take off. And during the housing
09:38bubble crash years, it was running at 250 to 400,000 per week for years. Those were sellers
09:44that were not going to be buyers. And a lot of them were distressed. So in a normal market,
09:48we're just quite not there, but I still think we can get to the low eighties. But it's been
09:53somewhat disappointing. And again, the start of the year was really good, right? The start
09:58of the year was just, you know, mortgage rates were on a six and a quarter. There wasn't any
10:02volatility, everything. And then, you know, we got the snowstorm and that tilted the data
10:06a little bit. And then after the snowstorm, things were back going again. And then the war
10:10happened. So it's kind of just like muddling through. But, you know, when we think about
10:16the forward-looking demand curve that we do with the tracker data, we always say that we want
10:1912 to 14 weeks of positive forward-looking weekly data. That typically runs with a couple
10:24hundred thousand. So far this year, we are exactly down the middle flat. Six positive,
10:30six negative, one flat. So it's basically the forward-looking weekly datas are just not doing
10:36anything. And earlier in the year, it was very positive. Again, snowstorm impact a little bit
10:43that in the more than snow states. Then we got back into growth mode again. And then the war
10:50happened. Of course, six and a quarter and under is the sweet spot. We got as high as 6.64%.
10:55The
10:55year-over-year growth and purchase apps went from 12 to five to one to negative seven. So that curve
11:01has been negative. The weekly data has held up a little bit better. But you can see the rate of
11:07change impact with higher rates. Now, it isn't like in the past where we see straight negative data
11:13like we've seen when rates get above seven. Just the housing market does not work with rates above
11:18seven. We get six and a quarter in there, but here we are. We're still dealing with the war.
11:22We talked about inflation and the rates in the last podcast. So we just have to take it one day
11:27at a
11:27time. But try not to over-read the inventory data too much. Because last year was a very,
11:35you know, percentage growth was really, really good. It was very high. And we just don't have
11:40that kind of marketplace. But we're also working from an elevated level. So when you get closer to
11:45normal, right? When you get closer to there, it's really hard to get like a really big move up higher
11:52or a big move lower unless you have a dynamic shift in the marketplace. So when there's not much going
11:57on,
11:58the year-over-year comps really work. And I think that's part of it. We had the existing home sales
12:03report today. And the year-over-year price growth picked up from the slower paces in the last few
12:08months. But just remember, those comps start to get easier as the year progresses on as well. So
12:16I understand the frustration from everyone. They want a clear direction one way or another.
12:23But this is why I think the tracker and our housing wire intelligence, when there's not much going on,
12:28you really got to get into the nitty gritty of data. And it's more of a slug fight, right? So
12:36buyers are back in the mix, right? It's not a total seller's market. That's how a healthy market looks
12:42like where both are competing in a more neutral stance. And it's going to be an interesting year.
12:50I just think our stuff works better in this environment so we could try to explain it.
12:55But I think a lot of people were shocked a little bit on the higher year-over-year price growth
13:00when
13:01the existing home sales slightly missed estimates for that point. And that's March report. Now we're
13:07in April. And it's like, soon you're starting to get to the end of the new listings data peak. And
13:11then we go to the seasonal lower part of this. So you got a good chunk of the year already
13:17in.
13:17So one of the things you always talk about is hug a mortgage spread. And once again, last week,
13:23mortgage spreads improved, and that was good for mortgage rates.
13:26So why do I highlight mortgage spreads so much, Sarah?
13:32Because they absorb the volatility.
13:34Yes. And part of the thing for me is that the Hodor line was created because I do not believe
13:42the
13:4310-year yield can get below 380 with neutral policy, right? That's the key. Fed neutral policy
13:49does not have a lot of history with rates getting below 5.75% when the Fed funds rate is
13:55trying to
13:56target 3%. So I can't get to the low sixes or the high fives unless the spreads get better. Now,
14:04this whole process started in 2023 where we started to focus on the spreads. And the spreads were getting
14:10better, but then the Silicon Valley banking crisis happened and the Fed still hiked rates during
14:14that. But after that, the spreads getting normal, normal, compresses volatility, and it could get
14:20us to that six and a quarter and under. So I would have a much different mindset if mortgage rates
14:27could
14:27get below 5.75% and stay there. I just don't see that as a possibility with Fed policy at
14:33neutral.
14:34And that's why I've always highlighted the 10-year yield of 380 and 5.75%. And we're here.
14:39We did break under 380 in 2024. That's because the market thought we were going into recession.
14:44That wasn't the case. So the spreads are really important, giving us a lower rate curve with less
14:50volatility. We see that this year. This year, we have rising inflation. We have war. We have oil
14:55prices that got to $117, but the 10-year yield never broke above 6.64% during that whole timeframe.
15:02There's a lot of rate cuts in the system. 65% to 75% of this is Fed policy. And
15:08then the spreads get
15:09better. And it took a few years for the spreads to get better. But here we are. And how we
15:13track
15:14it is 2.05%. The low point, I think it was 182. So we got a little bit of more
15:18maybe leeway to get
15:21back to the low levels of the year. And that's kind of it. And we just got to grind through
15:26the marketplace in this kind of fashion. But to me, things work better when you're six and a quarter
15:32and under and less volatility. Because it's going to take time to get... This is not like the COVID.
15:373% mortgage rates, very low levels of sales. Affordability was better, Dave. Affordability
15:42is still an issue. But you just kind of have to take the weekly data with the knowledge that rates
15:48are a little bit lower, less volatility, and affordability gets a little bit better every
15:53single year. As long as home prices do not rise faster than wages, this will be the third year in
15:59a
15:59row. That affordability gets better in that way. That's why we were team higher rates. That's why
16:04inventory going up is a positive. That's why last year was, yes, we needed that. But now it gets
16:11nitty gritty. So you got to be careful who you're listening to out here. Because the new listings data,
16:15active inventory, price cut percentages, weekly pending sales, purchase apps, 10-year yields,
16:20the whole enchilada. And what else we talked about over the weekend is mortgage rate lockdown.
16:27Yeah. Yeah. So Sarah and I, for those who don't know, we always had a disagreement on mortgage
16:32rate lockdown. And I always tell people the mortgage rate lockdown is the greatest doomsday scenario for
16:38housing ever. Because nobody would list their house to sell to buy another one, and you wouldn't
16:43have inventory. So Sarah, you and I... So where I took issue with this is I don't think it was
16:48like
16:48nobody. I didn't think it was nobody. You're pointing your fingers at me again.
16:54Okay. In any case, you and I could agree that first-time homebuyers don't have a mortgage rate
16:59lockdown. They don't have a house. Correct. You and I could agree that 40% of homeowners who don't
17:05have a mortgage do not have a mortgage rate lockdown. Okay. So there's between 30,000 to 80,000 new
17:12listings in a seasonal period of time throughout the whole year. Who do we think those people are?
17:17I'm not sure. Okay. So most of them are ages 35 to 65, elder millennials, Gen X, baby boomers.
17:26They list their house. They sell. And if they were buying houses with cash, cash volumes would be
17:32rising in a tremendous way, or cash percentage of sales would be rising in a big way. Not happening.
17:38Right? And so those are the... Imagine if the mortgage rate lockdown actually... And these people
17:45didn't list their house, didn't sell their house to buy another one. Existing home sales could go a lot
17:50lower. We're talking near 2 million. So that's why I'm trying to teach people not to put all your eggs
17:58in that basket because home sales would be a lot worse than what they are. So near 5 million total
18:03home sales, 2023, 2024, 2025. Okay. Now the peak in the last decade was near 6 million. So we are
18:12missing
18:12roughly 675,000 mortgage buyers to get us back to a normal curve, like in the decade.
18:19Like per year, right?
18:20Yeah. Just more mortgage buyers in that sense. So if you have more first-time home buyers, right?
18:27First-time home buyers get hit with affordability because they have to finance their stuff.
18:30Sales grow, right? And then affordability gets better. You get more sellers that'll be buyers,
18:35but that seller then has a mortgage buyer and that's the transaction model. So if you had a
18:40mortgage rate lockdown, it is doomsday. It is death out there because you would have much lower home
18:47sales. But every single week since 2022, they list their house. They sell their house with a low mortgage
18:54rate. They buy another one with a higher one. I know it doesn't make sense to a lot of people,
18:57but they do it. And that's why the 3% to 4% mortgage rate holders went from 40%
19:02to 30%.
19:03The people with sub 3% have gone down, but the people with 6% plus have rise from, I
19:09think,
19:09like 6% all the way up to near 20%. So that's the transaction model. So you're missing still about
19:18a million more home buyers from the peak of the last decade. But if you didn't have the people listing
19:25their house to sell to buy another one, home sales would be so much lower than what it is right
19:29now.
19:29But they're still here.
19:30This is where we disagree because I'm like, that missing, that's the mortgage rate lockdown. The
19:36lockdown doesn't mean nobody does it. The lockdown means less people do it. That's what I think.
19:40So the variable is that first-time home buyers aren't hit at all because I could make up like
19:4578% of the missing demand is from first-time home buyers. So that's why I would say like first
19:52-time
19:52home buyers get hit because they have to finance things. So we always say, everyone says a first-time
19:57home buyer. Well, if they just kind of go back a little bit more, you get the sales curve higher,
20:02right? And that means affordability gets better because affordability is not just a mortgage rate.
20:06The mortgage rate is this one variable. It's a couple hundred dollars where the base
20:09median or the sales price is with a down payment and property taxes insurance. That's why the concept
20:14to me is flawed because you should have a lot lower home sales if there was an authentic,
20:19but the biggest home buyers in the last few years, ages 35 to 65, they were just selling that house
20:27to buy another one. That's why I don't like the mortgage rate lockdown. So it's confusing to
20:31people when they see the mortgage rate breakdown fall down. But if you look at it as new listings,
20:37age, home buyer profile, it makes sense more. Like I have the cheat code because I have people who work
20:43in the coupon area and they look at, they see people relinquish their rate and all of a sudden
20:49there's another person with a higher rate and they're not first-time home buyers. So I see it
20:54a little bit different. But if you look at it in that way, then we can explain why we have
20:57near
20:575 million total home sales and the peak was 1 million in the last decade. You don't want to use
21:02the COVID period as a baseline because years 2020 to 2024 had the biggest housing demographic patch ever
21:08and that was it, right? Like that's a once in a lifetime event. But you can look back in the
21:13last
21:13decade and you get near 5 million existing home sales and wherever new home sales run, it looks
21:18normal. So affordability gets a little better over time. It works itself out. This is why I'm not a big
21:24fan of demand stimulus by the government in this state. You got to let the housing market kind of
21:29take its course and kind of fix it on its own.
21:33This is one thing we agree on. We do not, we do not need more demand. All right, Logan,
21:37we are out of time. Everybody, you can go find the housing market tracker at housingmar.com under
21:43the news tab. It's right there and you can get all of the charts and you can read the tracker.
21:48And
21:48of course, come see Logan and I at the gathering. Come see us. Can't wait to see you guys. Logan,
21:54thank you so much. Thank you so much, Sarah. Have a wonderful afternoon.
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