What the government can — and can’t — do to lower mortgage rates - video Dailymotion

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On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about recent government actions and whether those will be able to lower mortgage rates.   Related to this episode:   What can the government do to lower mortgage rates?  https://www.housingwire.com/articles/what-can-the-government-do-to-lower-mortgage-rates/   HousingWire Mortgage Banking Summit – October 1  https://events.housingwire.com/mortgage-banking-summit-2026?utm_source=housingwire&utm_medium=website&utm_campaign=hwd_podcast_0728   More info about HousingWire  https://lnk.bio/housingwire   Top 5 Trending:   NEXA Lending acquires UMortgage, adds Anthony Casa to exec team  https://www.housingwire.com/articles/nexa-acquires-umortgage-casa/   Fannie Mae reportedly cuts senior executives across business lines  https://www.housingwire.com/articles/fannie-mae-senior-departures/   Zillow, Redfin reach last-minute FTC resolution before trial  https://www.housingwire.com/articles/zillow-redfin-ftc-resolution/   What can the government do to lower mortgage rates?  https://www.housingwire.com/articles/what-can-the-government-do-to-lower-mortgage-rates/   loanDepot receives NYSE notice over sub-$1 share price  https://www.housingwire.com/articles/loandepot-nyse-share-price-notice-earnings-context/   Want more from Sarah? Don’t forget to subscribe!   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

00:11Welcome, everyone. I'm joined today by lead analyst Logan Motoshami to talk about what the

00:15government can and can't do to lower mortgage rates. Before we get started, here are the top

00:19five trending articles on HousingWire.com. First is the news we broke over the weekend that Nexa

00:25Lending acquired U Mortgage, followed by Fannie Mae's layoff of senior executives across business

00:30lines. Then we have Zillow Redfin reach last minute FTC resolution before trial. And Logan's

00:36latest, what can the government do to lower mortgage rates? Finally, we have Loan Depot

00:41receives New York Stock Exchange notice over sub $1 share price. Okay, let's dive into today's topic.

00:48Logan, welcome back to the podcast. It is wonderful to be here. These Monday mornings

00:53and these announcements, the closer we get to midterms, we realize what the game plan is here

01:00by the White House, the Treasury. And I'm sure President Trump has been talking to Kevin Warsh

01:07by phone on, you know, what can possibly be done to lower rates before the midterm comes in.

01:14So it reminds me of last year when we went through a whole slew of like, throw things up against

01:19the

01:19wall on a, you know, what could, what could help housing affordability, some of which were good

01:23ideas, some of which were maybe not good ideas, but they were really looking around. How does this

01:28differ from that?

01:31So President Trump does have a correct premise. Housing demand will pick up if mortgage rates go

01:40lower. He's kind of says all this other stuff is Mickey Mouse, you know, like the, the, the road to,

01:46you know, the, the building act that was done. I mean, we're not going to build a amount of homes

01:53to change a difference this year or next year or the year after really. But, you know, I think about

02:02when we did our Trinity discussion the day after Trump won and we said, you know, lower dollar,

02:07lower energy, lower mortgage rates. Obviously the conflict has changed the whole, the whole chess

02:16piece for this year. But it's getting late in the year. We're going into September. So the fastest

02:25resolution that has the most impact that people will feel is lower mortgage rates, right? And a lot

02:31of people, Oh, if you lower mortgage rates, housing prices, housing prices have gone up pretty much every

02:36year outside of 2007 and 11. And then you take 1990, 91. You can't run a, you can't run an

02:42economy

02:42assuming that rates have to be a certain level because if prices go up, this is, this is not the

02:48country

02:48you want to live in. I suggest you all leave, to be honest with you, if you're waiting for that.

02:55The problem is,

02:59you know, when you do a trade war and the Fed was going to let the trade war kind of

03:04wind itself off,

03:06right? They, they, they, they gave the president out, don't make it worse. And we'll wait. And,

03:13but the problem is when you do the conflict and we say this, Neil Kashkari went on CBS news yesterday,

03:18Sunday, Hey, we don't like the conflict. We're not confident about it. The trade war with Canada might

03:23get, you know, so the government's actions are going against what their attempted other actions

03:32to lower rates are and what they're doing right now, what they have done doesn't work with that

03:37Trinity game plan. So Scott Besson is throwing stuff up in the air right now. He's doing this TGA fund,

03:45which, you know, my first thought was like, Oh, we're not going to get a government shutdown,

03:50you know, before the midterms, because that's, you know, you, you have that money stored just to

03:55make sure all the kind of bills are paid, but they're throwing everything they have. I'm sure

04:00Pulte is going to do an LLPA announcement, you know, anything you can to get mortgage rates lower.

04:06Cause if you just get rates down towards 6%, housing demand grows, a lot of the, you know,

04:15talking points kind of go away with growth and then the headlines become better and better.

04:19And that's what he likes.

04:22I forgot about the LLPA announcement. What was that Thursday night, Friday night,

04:26something like that. My Pulte just tweeted it and we're like, okay, what does this mean? And

04:30we reached out to a bunch of people and they're like, we don't know anything about it. So we're

04:33waiting to see, seems like they're going to do that. But I forgot that because I was focused on

04:38the trade war with Canada and then, uh, best since bond buying. Yeah. So politics to your political

04:45cycles. Right. And, you know, and, and again, just, just to reference the original point that

04:52we've always made here, even if you didn't have a trade war, even if you didn't have a conflict

04:59and the growth rate of inflation was tamer, it's really hard to get mortgage rates under 5.75%

05:07with neutral policy being at three. So there's limits to the downside, but obviously we've all

05:13seen this now. This is the fourth year. Whenever rates just get down to six, you can get some

05:19things going. It's not going to be like a booming housing market, but you can get things moving.

05:24What, what I think the difficulty is you have higher energy prices and you have higher bond yields.

05:28And we've also said that the White House and the treasury does not like the 10 year yield above 460.

05:35You know, Godzilla tariffs were shut down because the 10 year yield got, I mean,

05:39we had a near 20% drawdown in stocks last year. It didn't matter, but the 10 year yield gets

05:43over

05:43460. They're like, Hey, Peter Navarro, go, go, go have an ice cream cone out there. Try not to get

05:50arrested. Um, Trump here, tweet this out. So this is just part of the original game plan for the last

05:57two years. But as we wrote into the article over the weekend, you need this conflict to end.

06:07The federal reserve hawks are just running around saying conflict is bad. We have no confidence in

06:13inflation. It'll be tamed. The longer the conflict goes, the more embedded inflation. So that's one.

06:18And now of course the Canada trade war got disrupted on Friday night and we're here on Monday morning

06:26and they're going to throw everything they possibly can over the next few months. Uh, I mean,

06:32the 10 year yield had a very, very yawning response. I think last time I checked was like 470, 471.

06:38Uh, so there's, there's limits to what can be done here. And we have Jackson hole where Kevin

06:44Warsh hopefully will speak or say something out there. Hashtag anyone but Warsh. I mean,

06:52it's just, you could just see this is, this is all just a kind of Trump's doing his puppet master

06:57routine. Do you ever see the puppet master movie like back in the eighties? Oh man. Yeah. So some

07:04of us Gen X guys, we had some gnarly horror flicks back then. Um, so this is, this is where

07:12we're at.

07:13Obviously they're, they're going to throw everything they can and we'll see if any of it works.

07:18So, so far the, the treasury's announcement about bond buying has not changed things, uh, for,

07:24for mortgage rates. They haven't, but I, I, I, I ponder to the thought that this was set up, uh,

07:31uh, as a headline because, you know, we're doing sanctions, you know, D-day sanctions on Iran.

07:39And they kind of wanted maybe something to offset that, you know, the timing of this announcement

07:45with the timing of the sanctions and now the Canada trade talks went over. I did see President

07:51Trump move the tariffs to January 1st. So you just have to work around the midterms and, and everything

07:57that goes on right, right about now. Cause I think it's, it's problematic, even though the president's

08:03not running anymore, um, going into the midterms, his life gets a lot more difficult if you get more

08:10democratic, uh, uh, uh, people elected. So, uh, they're going to throw everything they can. We'll

08:16see if any of it works. We'll see what sticks. I think that, you know, um, for a lot of

08:23administrations,

08:24especially this one, if they could do something about mortgage rates, they would. Although you have

08:29said, like, if you, if you really care about mortgage rates, you know, why did you start the

08:32conflict that these things are not, uh, don't go together, but I mean, there's just some things they

08:37can't do. You know, it's, it's interesting. Uh, one of my Doomer nemesises, you know, uh, did make a

08:45very, very good point. So we would do that meme, like, you know, the guy you don't like, you actually

08:51agree with. Um, George Gammon talked about how the 10 year yield is not being impacted because of

08:58federal debt or the bond market is getting way. I mean, growth and inflation and the Fed is getting

09:03hawkish. It's, it's acting like it normally does. And people were putting up Bill Clinton's deficits.

09:09I was like, y'all, y'all don't remember the 10 year yield was much higher back then. Nominal growth

09:14was, was good back then. So it's, there's a lot of confusing things out there, but I just think that

09:23if you really, really, if like affordability and mortgage rates were your, your main thing,

09:31um, you wouldn't do tariffs and you wouldn't do the conflict. Right. And I don't know. I mean,

09:36to me, it's just like, I, I just assumed that this whole Iran plan was, was already as soon as

09:42Trump

09:42won, eventually they were going to go in. I mean, you don't invade Venezuela, Iran, you talk about

09:46going into Cuba and taking Greenland all, all of a sudden, you know, this, this, I mean, I'm assuming

09:50this is part of that, whatever that 2025 playbook was, but it's lasted too long. So, um, there,

09:58this, this is where we're at the, the federal, we went into the year with two to three rate cuts,

10:04supposedly priced or going to be priced in or, or done at some point, the labor data was getting

10:09very, very weak toward the end of the year. And then the labor data started to improve. I, I look

10:15at

10:15it as just the flow of economic data through a trade war chaos first year and the second. So

10:21don't think of it as re-acceleration. Just think of it. The drama is over. The drama is somewhat

10:26tamed and here we are. Um, and, but the 10 year yields at four 70, uh, uh, and the one

10:34variable

10:35that has stick that has been here all the time that bond markets trade very bad on is the conflict.

10:41And Neil Kashkari went on TV and said it again, even though he kind of said, I don't know why

10:46the

10:4610 year yield or long and well, shut up, man. Come on, come on. Don't, you don't need to,

10:51you don't need to sucker like people. Everyone knows what's going on. Fed got hawkish. The feds.

10:57Now we have multiple fed people talking about rate hikes and Kevin Warsh is in their task force. I

11:04still need to wait for the task force to get back to me. And Beth Hammock took control of the

11:08federal

11:08reserve and Beth Hammock made it very public that 20,000 jobs are being created a month. We don't

11:14care because inflation is above target. So this is where we're at. We're going to get an, uh, an

11:19interesting Jackson hole thing at the end of the end of the week. But to me, this, I, when I

11:24wrote

11:24the tracker article, I just, we're really want to see how the bond market will react to the Canada news

11:28and, and, and the sanctions. And then Besson came out here and let's, let's bring all the bazookas

11:35or whatever we can to try to, but I, I still look at it as a defensive mechanism to try

11:40to keep

11:41yields from going higher because it just re it, it just highlights, you know, the issues that the

11:47government has in trying to get this conflict over with. And now the Canada trade war is back

11:53in play. So I'm going to get a t-shirt that says, this is where we're at. This is where

11:58we're at.

11:58Cause I feel like you have to say that a lot. Cause it is where we're at. Well, let's talk

12:02about the,

12:03um, about the housing data, the tracker. Um, we've already talked about like mortgage rates and,

12:08and the spread. What else stood out to you this week? You know, um, we saw a slight week to

12:15week

12:15growth on our pending sales data. Um, the year over year decline is just a smidge. I mean, if you

12:21take the last four weeks, the growth rate of housing has slowed once rates got above 6.64 has had

12:28some

12:28duration. That's not shock to us. It's our talking point for years now, right? It's last year at this

12:34time, because of spreads, we're going to get better. They typically get better toward the end of the

12:37year. You know, you're going to get mortgage rates heading toward 6%. The supply and demand

12:41equilibrium changes. Um, last year we had a lot of people talk about unemployment rates are rising,

12:47home prices are falling. I was like, no, they're not people. I don't know what you're looking at.

12:52Uh, the labor market is not breaking when national nominal home prices fall. It is so easy to see

12:57because we rarely see it in history. And a lot of people do this gimmick that, you know, the median

13:02sales price is very seasonal and then it declines and people just, we still have some crazy people

13:07talking about housing. In any case, um, last year we talked about the housing market shifted in mid

13:13June, right? Just our supply and demand equilibrium changes with rates below 6.64. However, it's almost

13:21September it's two months past the midpoint. And we talked about the year over year growth of

13:26inventory is going to slow. A lot of this is a comp play and, uh, uh, it's going to, it's

13:32going to show

13:33less growth, less growth, and possibly some negative prints going up to mid June, 2026. That's what

13:38exactly happened. But now we are almost in September and, uh, rates have been elevated to yearly highs

13:47for the last few weeks, but the year over year growth is like 1.57% on our data.

13:53That's growth of inventory?

13:54Inventory. Yeah. Um, and then the NAR's report in the last month, I remember the NAR is different

14:01than us. NAR attaches contracts to their data line. So their inventory data is always going to be larger

14:07than ours. We have just raw single family homes, no contrast. These are homes available for sale.

14:14In any case, it's August 24th or in, in the, uh, what we see is just very, very little growth

14:21on a

14:22year over year basis. Um, and of course the, the, the red fin thing got play again or the weekend.

14:28And we just had to say, you know, this is just not happening. Uh, uh, Mike Simonson even joined in

14:35on the, you know, to try to say, no, the, the inventory is not surging at all guys, you know,

14:40stop making up stuff. Uh, I w I would say this, how I, how I want to explain why inventory

14:47growth

14:48is slowing down. All of us were working from historically low levels that were very abnormal.

14:54When I mean abnormal, it's never happened. Um, from what, from what level 20, from what we saw

15:00in 2020, 2021 and early part of 2022, we never had inventory active listings that low in the history

15:09of America. We have, we always talk about the low base effects of data. This is the lowest ever.

15:16Um, this is hence the unhealthy housing market at the end of 2020. The, the, we need team higher

15:22rates in 2021 because inventory is too low and prices can escalate. That's what happened in 2021.

15:28The savagely unhealthy housing market in early 2022 that I just threw up the flag and say,

15:34this thing has to blow up because this is not good. We're good. We're heading toward another

15:3817 to 19% home price growth here. So thankfully that occurred. And, you know, instead of being up

15:4718%, uh, uh, uh, in 2022, we were only up, uh, uh, 6%. So, but when you're working from a

15:55low base

15:56effect, you have to realize the closer you get to normal, right? The more work it's going to take

16:02to get, you know, when people think escalating inventory, I think Florida was a good example.

16:07Um, Florida inventory has been down year over year. I mean, really it started mid June last year,

16:14but it's noticeably down. So the national data is just not showing. And the closer we get to normal,

16:20which for us is about, you know, uh, over a million single family active listings during the seasonal

16:25peak months. So, you know, we're, we're, we're heading there. We're not quite there. It just takes a

16:30little bit more work. And I've always said that higher rates can rise inventory because it just

16:35means that, you know, if 70 to 80% of home sellers are buyers at 20, 30% inventory gets

16:40left over,

16:41that's usually bought by a first time home buyer that doesn't give you a house or an investor

16:45that has cash to buy another property. So, um, it's harder to get inventory to grow,

16:51especially if you look at the, since the qualified mortgage, you know, the Dodd Frank bill came in in

16:562010 qualified mortgage legally came in 2014. If you look at how inventory channels have worked

17:00since then, a lot has changed. Um, but higher rates can make inventory grow. It's just that the demand

17:07now is not like breaking in a big way. And I thought that the tracker did a very good thing,

17:14kind of showcasing that, you know, week, week to week demand was positive slightly year over year

17:19decline, slight decline out there. Uh, we saw it, we saw inventory grow on a year of year basis, but

17:26stop, stop this podcast for this very, very important message. The rest of the year is going

17:33to have a lot easier comps to show inventory grow and a lot of, a lot, a lot harder comps

17:40to show

17:40home sales to grow year over year. So just like I've highlighted, you know, the early part of 2026 guys,

17:47this is a comp story. So the inventory growth slowing down a lot of that is because the year

17:51over year comps are going to be very easy to show, uh, the growth rates slowing. Now it's a,

17:57it's going to be different. So, um, the purchase application data started to take off, uh, right

18:03this time last year. So the year over year data, you have to take it into context on what it's

18:07really

18:07saying. So is the existing home sales report and our weekly pending home sales, but the inventory

18:13is going to have easier comps to show growth. Now higher rates and weakness demand should mean

18:18inventory growth picks up price cut percentages increases. We've talked about that in the tracker

18:23the last few weeks that the year over year price cut percentages should be on par eventually with

18:272025 and then, uh, uh, should surpass it if rates stay elevated. And that's how the rest of the year

18:34is going to, the backdrop for that is going to be because last year it was, you know, the housing

18:39market shifted, inventory growth slows down, pricing is slightly firm up toward the end of the year.

18:44And it kind of did to keep, uh, uh, the year positive, but now we go, it's going to be

18:51a

18:51little bit different, but still, even with that, we haven't seen inventory really take off. Uh, new

18:56listings data still up positive year over year, but it's nothing abnormal, uh, not quite back to

19:02normal levels. We're almost there, but that's how we should look at for the rest of this year.

19:07Cause we are about to enter a crazy phase between Iranian conflict, Canada, midterms. I, who knows

19:16what Besant and Pulte and Warsh have up their sleeves. And this is it one day at a time, guys,

19:22one day at a time. This is not, uh, uh, not, not a quiet year, of course, or 24th. Um,

19:30uh, and then

19:30of course there was a lot of talk about AI and data centers, uh, over the weekend and this morning

19:35as

19:36well. And so it's just the two-year political cycles. It's been crazy. Logan, thank you so

19:42much for being on and thank you for writing the tracker. We'll talk again soon. Pleasure.

What the government can — and can’t — do to lower mortgage rates

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