Mortgage rates and oil prices this week

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about how oil prices and mortgage rates have moved this week amid the Iran conflict.  Related to this episode:  The Iran conflict hasn’t pushed oil and yields higher this week — here’s why https://www.housingwire.com/articles/the-iran-conflict-hasnt-pushed-oil-and-yields-higher-this-week-heres-why/  HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q  More info about HousingWire https://lnk.bio/housingwire  The Top 5:  Google expands real estate listing ads to all 50 states https://www.housingwire.com/articles/google-listing-ads-nationwide/  Why purchase applications are rising even as mortgage rates climb https://www.housingwire.com/articles/why-purchase-applications-are-rising-even-as-mortgage-rates-climb/  Existing home sales beat estimates, what it signals for 2026 https://www.housingwire.com/articles/existing-home-sales-beat-estimates-what-it-signals-for-2026/  Figure CEO Michael Tannenbaum on the strategy behind $717M Kiavi purchase https://www.housingwire.com/articles/figure-ceo-kiavi-deal/  CoStar targets Zillow Preview in amicus filing over MRED feed https://www.housingwire.com/articles/costar-zillow-mred-brief/  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

00:09Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about oil prices and

00:14mortgage rates this week. First, let me wrap up the top five trending articles on housingwire.com

00:20today. First, we have Google expands real estate listing ads to all 50 states, a very big deal,

00:26followed by Logan's stories on purchase applications and on existing home sales.

00:32Then we have an exclusive interview with figures Michael Tannenbaum after their acquisition of

00:37Kiavi and CoStar target Zillow preview in a filing over the MRED case. So much going on. Logan,

00:44so much to talk about today. Bring us up to date because lots happening even this morning. It's

00:48Thursday morning when it comes to oil prices. And then we'll talk about how that is going to

00:53influence mortgage rates. Okay, this is one of the most interesting weeks for myself as somebody

01:00that's watching oil in the bond market. It's the most interesting week of the conflict. And this

01:06is just more how the oil markets and bond yields are trading to news. So I woke up early in

01:12the

01:12morning, I saw one of the big oil people just completely lose it because he thought, why is

01:16an oil over $100? And I thought to myself, and you know, I do these crazy Instagram videos, you know,

01:22and I had to, you know, I'm getting older, Sarah. So when I do these things early in the morning,

01:27I got my eye patches on and, you know, just try to, you know, try to make sense. But I

01:32wrote an

01:33article early in the morning to just give you my perspective, maybe from the mindset of a trader and

01:39not somebody that's watching the news or a pundit or somebody on Facebook or to that regard,

01:47that why isn't oil going much higher this week? And why isn't the bond yields going much higher? So

01:53early in the morning, when I wrote the article, I was basically presenting a case that

01:57this week was pretty crazy. We are attacking Iran every night, early in the morning. There was a lot

02:07of back and forth talks about, you know, we need to take over the islands and we need to,

02:12we need to take over the fields and, and the oil markets don't really react as much. And I always

02:21do these oil charts and I show people that we have never been able to go really above the previous

02:26high. We're kind of in a downtrend on oil prices and the 10 year yield this morning, right before we

02:33talked, you know, was 4.52% with two attacks on Iran, Iran shooting missiles, back and forth craziness,

02:43a hotter PPI inflation data, and the oil markets and the bond markets do not care. So I'm going to

02:50try to explain why this might be the case this week. I appreciate that because early on in this

02:56conflict, you looked at how, what was happening with the oil prices. As soon as it became clear that

03:01this was not just going to be a Venezuela move where it was quick in and out. And you've ever

03:05since then explained things like, Hey, let's look at what this means and how this might affect the

03:10housing. So, so give it to us, Logan, what's going on. Okay. So what do we always say throughout

03:15this whole conflict? Cause I said, if the, if the thing lasts past March 21st, something went wrong

03:21because that this was supposed to be a get in, blow up and whatever, kill some people and leave.

03:26Okay. It was fast March 21st. Obviously the U S didn't think that Iran would shoot their

03:31neighbors or close the street. So the military wasn't prepared for that. In any case, we always

03:37say that the second week of June going out further, it's a little bit more problematic because oil

03:43inventories are drawing down. China has a big reason why oil is not above a hundred. They're

03:47importing less and they're using the reserves. Uh, and not just cause they want to help Trump is

03:52because the Chinese are much poorer than, than the U S our, our households could handle oil prices

03:57higher than their camp. So, so they, they have their own agenda, but this week something is not

04:03working right anymore. So the last time I checked oil was at four 52 or 10 years at four 52

04:11oil was

04:11like 90, $91. But why, why are traders not valuing this conflict going at this stage? And to me,

04:21as a trader, you just a commodity trader, you just want to put money into something that you could

04:26actually make more money in. So they're not the march of dimes either. And commodity prices can be

04:33very crazy. Like, you know, fertilizer prices, what it was like about $986 down to $780 in a very short

04:39time. Do you want to make this commitment to the next stage? Because it's much more difficult now in

04:45June. And I don't believe oil traders feel that the next stage will be escalation. And this week we had

04:53everything. We had every single thing that actually could, could push oil prices high. We couldn't get

04:59over $94. And then we couldn't get the 10 year yield, you know, uh, uh, to break about four 58.

05:06And now it's lower with two nights of fighting and the president threatened to attack again. And I just

05:13don't think the, the white house wants to take it to that next level, but I'm not sure how long

05:18Iran

05:18thinks it could hold out as well, because they want to make, they want to make Trump and the

05:23Republicans feel the pain as much as they can going into the midterms. But here, uh, I just don't think

05:31oil traders think that the next thing is escalation and oil prices are going to take off. And, you know,

05:37you know, and there's no deal going to be done because Iran has their own, you know, uh, a pain

05:43threshold as well. So, and in all this, you've felt like, listen, the oil traders, this is a good

05:48group to listen to because they're closer to the situation and they, you know, they might know more

05:54than other people. And so you're looking at that, like what oil prices is doing. This is why it affects

05:59us. I've always thought oils traders, man, these people are vicious. They got people in boats and stuff

06:05and running around and doing things, uh, trying to find out what's really going on with ships and all

06:10that stuff. But in this case, we had multiple events that should have put oil prices above 94.

06:17We had multiple events that the 10 year yield should be above four 60 and rising higher.

06:22That has not been the case at all this week. And I just think that oil traders don't buy the

06:29white

06:29house's take that they're going to escalate, uh, this into the next stage. And that's why I wrote

06:35that article early in the morning to try to give maybe the trader. Cause a lot of people were

06:39confused. I totally get it. Like, imagine if you're just a normal person and you see us attacking

06:44Iran twice and threatening to take over their eyelids and PPI inflation is hot. Here I go. It's

06:49the 10 year yields down and oil prices down. So that was the reason I wanted to write that article

06:54just to give you a kind of a take on this, because I saw a lot of confused heads early

07:00in the

07:01morning. And maybe this might make some sense because to me, it's like nobody really believes

07:07this goes to that next stage. So you wrote an article about like, what happens if it's really

07:12over? This was in May a couple of weeks ago. And then you're like, and then you wrote an article

07:16about what happens if this goes longer to the midterms and you laid out like three different

07:20levels. You could see what would happen to mortgage rates. Where are we on that sort of,

07:25wait a second. It looks like Trump canceled the attacks tonight. So, all right. So oil is down

07:35even more and the 10 year yield is down even more. So live Thursday morning events, you know,

07:42this thing is wicked. See, this is wicked right here, you know? So in any case, going back to your

07:49question, if the war was to me or the conflict was over, the 10 year yield should get to four

07:57points,

07:57you know, 4.46, 4.48. That to me is like the first level. Okay. We're done. We have a

08:04lot. We

08:04have inflation getting hotter. Like, you know, if you look at from 1996 to 2026, right? We've only had

08:11two times in history from that period of time where inflation took off, right? From 96 to 2020,

08:17inflation was relatively tame, but then COVID happened, right? And global pandemics, very

08:23inflationary. Go study them in the history for 500 years. They're very inflationary. Then the

08:28disinflation happens. That could be explained. It's not because the U.S. was printing so much money or

08:33anything. Go look at all the inflation data from the G20 countries. They all look the same too.

08:37You can't, you can't have a global pandemic and not have inflation. But this, this is not a global

08:43pandemic. We had tariffs, right? They were going to, the Fed was going to one-off the tariffs just

08:49for one year. And then we have a war, a conflict that drove oil prices. So you put those two

08:54together,

08:54we have chip shortages again. We have all this stuff, you know, coming in and yeah, you, you,

09:00the PPI inflation's hot, the CPI inflation's hot. We have both those reports today and the 10 year

09:05yield is lower. As of right now, I'm looking at it, you know, we're, we're under 450 again.

09:11And it's confusing. I get it, man. But just almost in a sense, think of a, think of a trader's

09:17reaction to things. And I just, to me, it does always look like they never believed in the next

09:23stage of escalation because it's not just the U.S. has to deal with the midterms. Iran has

09:29financial issues as well. And the last thing they want to do is, you know, if we take NATO's word

09:34for

09:34it, they're going to have to come in in July. Then all of a sudden you got the U.S.,

09:38you got NATO,

09:38you got Israel, you have no money, you have no oil revenues, right? And they're bombing everything.

09:43You have no defense on that. And you can only do the straight of Homo. So, I mean, it's both

09:49parties

09:49and the world have something to lose getting past June, the second week of June. So here we are

09:55crazy that this happened live while we're talking, but that's the reason why I wrote that article early

10:02in the morning to try to make sense. Cause everybody was just like, well, what's going on? We're

10:06attacking every night now. And, you know, oil prices can't get above 94 even.

10:10I love that it happened while we were on the podcast because we're always like, as we're doing,

10:14we're like, listen, anything could happen. Anything could change between when we record

10:18and when this goes live.

10:19This is why I've got it wired when we're on Sarah. Cause I just, I just don't know, you know,

10:24in this regard. So the time it worked out, but in any case, hopefully, hopefully that article,

10:30hopefully this podcast could kind of make sense of today. And then, you know, just,

10:33it gets, it gets harder for everyone in the world, like, uh, like India is going to run out of

10:39oil

10:39in 71 days. You know, China doesn't want to oil prices with their economy. So there's a lot of

10:45things that are, are hoping that this deescalates. My concern is always when you get to the later stage

10:50of something like president Trump's really frustrated, he's really frustrated that they

10:54haven't signed this deal that everyone's been talking and working back and forth for. And, you know,

10:58because of that, he's going to attack, he's going to attack every night, you know,

11:02or whatever, just to try to get something. And for Iran's part, they want to inflict as much

11:06pain as they possibly can, you know, uh, until, until their threshold. I mean, they know, they

11:13know their, their lever, their pain threshold points as well. So it is what it is. It's, but I

11:18thought this was the most interesting week of the conflict in terms of how oil prices in the bond

11:23market. Oh man. And luckily, I mean, we haven't seen escalating mortgage rates to your point. So

11:28that's good. So speaking of that, let's talk about purchase apps this week, right? Because I thought

11:33that was really interesting. We have all of these things happening. What did we see in purchase apps?

11:37So because of the existing home sales beat estimates, you know, I was on X and, and people

11:42were saying, well, okay, that's, that's in the past purchase application data is going to get hit

11:47really hard. And I was like, you know, it's the second week after Memorial day, guys, I usually it

11:51bounces back. No, no, no. Rates are near, near yearly highs. They can't, they can't possibly.

11:57Boom. 17% year over year growth, 7% week to week growth. And everyone's like, what is going on?

12:03So

12:04we wrote that article as well. Wise purchase application data is okay. Some of it is the

12:08week to week seasonality off of holidays, but to have 17% year over year growth off of last year's,

12:15that's a, that's a noticeable print. Kind of just remember one of the reasons why I always like to

12:19emphasize. We had the fastest crash in home sales in the history of America. That 4 million level is

12:28really big to my work for, for like 15 years. We have to be able to hold that 4 million

12:33level

12:33because if we don't hold that 4 million levels, technically we would have a mortgage rate lockdown

12:37and home sales would go to 1.7 to 2.3 billion. We have so much more downside to home

12:42sales, but it

12:42helped. Millions of people buy homes every single year, but this is like the fourth calendar year.

12:49And every year that goes by wages grow, households are formed. People have sex, they have kids,

12:56they get married, dual household incomes, right? So housing got a little bit better affordability

13:04wise because home price growth is slowed down. The whole, what was the whole concept of team higher

13:08rates? Like we have a lot of new listeners. Thank you all for making us one of the top 10

13:12business or one of the top 20 business news podcasts in America. An award-winning podcast

13:19as well. Sarah Wheeler, we still have that award. For those that are just listening to us recently,

13:26back in early 2021, where we were dealing with the forbearance crash bros, you remember those guys?

13:31Oh, they were awesome. They were so awesome. If any of you are listening, God bless your souls. You

13:35were a lot of fun. I was so worried about prices escalating out of control that every Bloomberg

13:41interview I was doing in January and February was like, we need higher rates. Y'all don't know what's

13:46about to happen. This is terrible. This is a very unhealthy housing market. We have too many people

13:52chasing too few homes. And people were like, forbearance, look at these numbers. I was like,

13:56idiots. In any case, team higher rates in February, 2021, where we wrote that article was that rates go

14:02up higher, inventory grows, price growth could cool down, right? Of course, 2021 home prices were up

14:08like 19% after 10% in 2020, very unhealthy. But now the last two years, not much wages have

14:14gone

14:14up prices. So affordability gets a little better. You get a little bit of better demand,

14:19right? If I thought mortgage rates would get below 5.75, I'd have a much more bullish take

14:24on housing, but I just don't believe we can get there. So just think of how I always say at

14:29the

14:29Nertor, we always do. My army's bigger than yours. I got 162 million people working Sarah Wheel. I got

14:38five generations. Five generations of people still buying homes. I have the silent generation. I got

14:45Gen Z. I got the baby boomers. I got the millennials. And I have the greatest generation of all time,

14:52Gen X. Gen X. Gen X. I always joke around. I still got my AOL account. We're the toughest

14:57generation of the world. We used to dial phones like this. Okay. Okay. One of our super fans,

15:05Martin Warren, right? Who's also, now he's like a friend. If you're really, you become a friend when

15:10you've become a super fan so much and we see you. He's with Nations Direct Mortgage. He asked me

15:14yesterday, because we were talking about your music preferences on the podcast. He's like,

15:20does Logan like the Beastie Boys? And I was like, I'll have to ask him. I would think so, but

15:25let's see.

15:26So for those that follow me on Instagram, it's always a party over there. You know,

15:30I'm such a nerd. Everybody like has these wonderful, happy pictures of themselves on

15:34Instagram and videos and stuff. I'm doing tenure yield and oil charts, you know, and posted charts

15:40up all the times, but I play my music. So yeah, we have a Beastie Boys, absolutely. Run DMC,

15:46you know, Eric B. Rakim, Kumo D, Ice-T, Ice Cube, NWA, 90s Hip-Hop, Jodeci, everything.

15:53These are great. 80s and 90s. I love the music, but I can play them on Instagram when I post

15:58stuff,

15:59you know? So we got Tupac and Biggie. We do everything. So yeah, I've used the Beastie

16:04Boys a lot of times. No sleep to Brooklyn. We do that stuff. Okay. Sorry. That was a digression,

16:10but good question for Martin. So you were talking about how you can now sell, we sell five generations.

16:16So we have five generation home buyers and you got cash buyers, investors. You put them in,

16:20that's a lot of people. Every year that it's four million, that base gets a little bit better.

16:25If affordability gets a little bit better, sales could a little bit grow. I always like to refer

16:29this back to the 1980s. Like the 1980s had home sales crash. Home prices never fell. Home prices

16:36never fell in the early 1980s with affordability worse. And we had two recessions and mortgage rates

16:42between 13 to 18% and more inventory. When I tell people, people are just shocked. And then I show

16:48them the data. They're like, you know, so this is why we study history. I know a lot of people

16:52don't

16:52like to study history, but this is what I do. But in the 1980s, affordability got better.

16:58One reason was mortgage rates went from 18 to 13%, but also, you know, home price growth cooled down

17:04a lot. That's why I say 2024 and five and six are very healthy because affordability is getting a little

17:10bit better. Right. And if rates go a little bit lower, demand could pick up a little bit and just,

17:14that's it. Just take it as that. Maybe that explains the existing home sales. Maybe that

17:19explains the purchase application data, but the purchase application data has had a slow positive

17:24slope curve really since the lows in kind of 2024. And if rates go down a little bit lower,

17:32don't go into this. Oh my God, everyone's going to sell, sell their homes. And we have 20 million

17:37homes on the market and home prices. Just say most home sellers are buyers. Inventory, you know,

17:43it's very hard for inventory growth. Mortgage demand picks up, but home price growth is,

17:47we don't have to worry about 6% mortgage rates and home prices taking off. Inventory is up,

17:52very healthy and demand picks up a little bit. And that's purchase application data. Because we are

17:56like, we went from 1995, we went from no doubt in Gangster Paradise to 2014, one republic and one

18:05direction. Right. We jumped 20 years of music.

18:09A taste for that. Oddly enough, I have a signed guitar from one republic. Never really heard their

18:15music, but I won that in a charity thing. We went to the NBA annual conference. They auctioned off the

18:21guitar and you bought it. That was so cool. Yeah, I got it. And I was like, yep, and I

18:25got it. And

18:27it's still in my house. But here, just kind of think it is that. The affordability got a little

18:32bit better rates. This is the lowest mortgage rate curve. When I mean mortgage rate curve is from

18:37January to the first week of June. This is the lowest mortgage rates for the first five months

18:42plus of the last few years. So you have a little bit better affordability. You have a lot more people

18:49that would be in that buying pool, right? Five, 106, over 162 million people working. And we're talking

18:56about 4 million. This is not like cars where cars have to sustain a 15 to 16 million sales rate.

19:01This is existing home sales down here. So it shouldn't be too shocking that we're doing this

19:07with rates having the slowest curve. If rates were above 7%, we would think, OK, what happened in the

19:12last few years? Housing demand tends to fade. But for right now, I think the fact that we had 17

19:18%

19:18year-over-year growth, 7% week-to-week growth with mortgage rates near yearly highs and all this drama

19:25and AI taking all the jobs and the conflict. And then nobody wants to buy a house because it's the

19:30most sellers in the history. I don't think Redfin's showing that chart anymore, by the way. Just saying,

19:36I haven't seen it for a few months. Maybe they gave up on that one. If that happened, I'm going

19:42to do

19:42like a gladiator walking from the gladiator in the movie. I'm going to have my guys right next to me

19:48that we won that battle. I digress. You do digress. I digress. But I'm just excited. It's

19:55been a really fun week looking at the markets. In any case, hopefully that explains why purchase

20:00apps are up. I just think the shock was rates are near yearly highs and it's up 17%. But just

20:05kind of remember, we are soon going to be on a year-over-year comparison. We're not going to have

20:12lower rates if rates stay up here. When did the housing market shift, Sarah Wheeler?

20:18Yeah. Mid-June of 2025.

20:20Mid-June of 2025. A lot of that, the 10-year yield was falling. Spreads were getting better. So

20:24mortgage rates had the ability to get below 6.64. Our work has always said, it looks different when

20:29rates get below 6.64 and head towards six. So it'll be a lot more interesting to see how the

20:34housing reacts in the second half of 2026 if the conflict ends and rates go down. But we're going to

20:42be dealing with not having lower rates on a year-over-year basis. And hopefully that makes

20:47sense. We're still very low levels with purchase application data as in scale terms. So always

20:53remember the base effects, percentage increases from low levels.

20:58Well, Logan, thank you so much for being on. Love that we had news break during the middle of

21:02it. And we know this is coming out on Friday morning. Shoot, Friday night is always a huge,

21:07usually we go to war on Friday night and then it somehow changes right before the market opens on

21:12Monday. So who knows what will happen between here and there. But I do think the framework that

21:17you've given people is really helpful.

21:19Thank you. And oh, was that a great NBA basketball game last night? Oh my dear Lord. Holy

21:25Talia. As a former high school basketball coach, I'm sitting there looking at the Spurs and thinking,

21:31guys, just take the ball to the rim. Why are you shooting all these threes? And by the way,

21:37Wimby, when you talk about getting in people's head, the fourth quarter, those last few minutes,

21:42you got in your own head, missed those free throws. So you all got to be careful about

21:46talking too much. But wow, that was just exciting. That's why I love sports. I'm still kind of amped

21:50up. I'm a Laker fan, but I have so many friends in New York and just between the Jets and

21:54the Knicks,

21:55you know, you just want to root for them for they could actually have something to cheer about for a

21:59while. No, I feel like this is our, we, it is bringing together the nation right now,

22:04watching the Knicks. It's amazing. No, no. You know, we love the Spurs, but like,

22:07this is not their moment. I don't think so. Logan, thank you so much as always. We'll talk again soon.

22:12Pleasure.

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