The mortgage rate outlook for the rest of 2026

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about the mortgage rate outlook for the rest of 2026.  Related to this episode:  Fed Chair Warsh will vote to hike rates if data doesn’t improve https://www.housingwire.com/articles/rates-after-warsh-speech/  HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q  HousingWire Mortgage Banking Summit – October 1 https://events.housingwire.com/mortgage-banking-summit-2026?utm_source=housingwire&utm_medium=website&utm_campaign=hwd_podcast_0727  More info about HousingWire https://lnk.bio/housingwire  Top 5 Trending:  Real REMAX Group halts Motto Mortgage franchise growth https://www.housingwire.com/articles/real-remax-motto-mortgage-platform/  Fed Chair Warsh will vote to hike rates if data doesn’t improve https://www.housingwire.com/articles/rates-after-warsh-speech/  Ryan Serhant doesn’t want to buy your brokerage. He wants your agents https://www.housingwire.com/articles/ryan-serhant-growth-earned/  Builders face a tougher math problem as completed inventory rises https://www.housingwire.com/articles/new-home-supply-9-6-months/  As Kortas and Casa make peace, AIME is back in the mix https://www.housingwire.com/articles/kortas-casa-aime/  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

00:10Welcome everyone. I'm joined today by lead analyst Logan Motoshami to talk about the mortgage rate

00:16outlook for the rest of the year. Before we dive in here, the top five trending articles at

00:20housingwire.com. The first is Real Remax Group halts motto mortgage franchise growth,

00:26followed by Logan's article, Fed Chair Warsh will vote to hike rates if data doesn't improve.

00:32Then we have Ryan Serhout doesn't want to buy your brokerage, he wants your agents.

00:37And builders face a tougher math problem as completed inventory rises.

00:41Finally, we have Ascordus and Casa make peace. AIM is back in the mix.

00:47Logan, welcome back to the podcast. It is wonderful to be here. It's Friday morning and

00:53actually we just got done with Kevin Warsh's Jackson Hole. Did you see the AI I created with him?

01:02You know, I had Kevin Warsh walking down the street as sunglasses on and you know, he's looking and he

01:09looks into a car and there's a 6% mortgage rate box. And he takes a rock and he breaks

01:15the car and

01:16he goes in and he grabs it and he runs away and the cops chase him. Pretty much that car

01:23is like

01:25with, you know, titanium steel plates now, you know, the 6% mortgage thing is not going to be a

01:30discussion for a while. But today's podcast is kind of goes with the article that we wrote on Friday.

01:37Like, what do we need to really think about going out in the future? Because we should just be

01:41focusing on mortgage rates for the rest of the year. And maybe less Kevin Warsh, less Scott Bessent,

01:50less Pulte, things that actually matter now. Because I think the Federal Reserve hawks won this battle

01:56months ago and the market is properly priced in the Fed hawkishness, which was correct. And inflation

02:04is still above target. The unemployment rate is 4.1%. Jobless claims are low. Wage growth is above 3%.

02:10So, I mean, I can make a case that the 10-year yield should be much higher in the Fed

02:13funds rate. But

02:14in any case, like what really matters going out for the rest of the year? And where are we with

02:20the

02:21spreads and everything else? And is there a working game plan to kind of get this just a little bit

02:28lower right now? Okay. Well, this is obviously top of mind for everyone in our industry. In your article,

02:33you laid out three things that you think we should be focused on now. So let's go through them.

02:38Yeah. Front and center is the conflict. Oil prices, last time I checked, was 83. So of course,

02:43oil prices are not over 100 or anything. But we are going into September. And the Federal Reserve

02:54hawks have made this so much about the conflict in oil. And they've even gave specifics that they see

03:00oil prices embedding itself into the economy. And diesel prices are for food. So less about Trump

03:10trying to take over the Fed or Besson trying some gimmicks or whatever it is. Things can get worse.

03:16I don't think people understand this, but the Federal Reserve has only gotten hawkish enough to maybe

03:21take the rate cuts from last year back, maybe over the next six to 12 months. They can get a

03:28much more

03:29hawkish and yields can go much more higher as long as nominal GDP growth is this high. So to me,

03:37it's

03:38find a way to get this conflict over with or the president just has to say, listen, we sacrifice

03:44some parts of our economy, but I need to get, I need to have Iran stopped. That is more important

03:52than Warsh, Besson, Pulte, Hammock. You get rid of that one, you take some of the hawkish points away.

04:00You know, like Austin Gools, we talked about, you know, and he would, if he was a voting member,

04:04he'd be voting for a rate hike. But he said, you know, the month to month data isn't bad.

04:08Just imagine if oil is 67, $68. Everyone's, all ships are moving. There's just going to be a

04:16better tone to the economy. So once you get that away, that's one variable. The second variable is

04:23the trade war when the Federal Reserve went into 2026, they thought, okay, listen, the labor market's

04:30off. So we'll let the one-time price off of the trade war go away and we're okay. We can

04:38still

04:38get to neutral policy. Well, if this is the case now, the Fed can get more hawkish if trade war

04:452.0 with Canada, one of our trading partners, gets to be worse. You can't have these two things still

04:52in play and think that you're going to get lower mortgage rates unless the labor market's breaking.

04:56If the labor market is getting weaker and jobless claims rising, you know, the 10-year yield can go

05:02lower. But if the unemployment rate is in the low fours and job growth is, remember, the Fed doesn't

05:08care about big job numbers anymore. I don't make the rules. They do. Bond market is going to go off

05:13them. So the third variable is something they can't control, but really it's the first two and people

05:20should really just not focus so much on Walsh and Besant and take care of those two. You can get

05:28rates a little bit lower. You can get the market picking up like we did earlier in the year with

05:32just six and a quarter to six and a half. You know, the data hasn't been terrible in the last

05:39few

05:39weeks just because rates are still like 6.76. But man, you can, the Fed can get really hawkish still,

05:47more hawkish than right now. So there is upside potential to yields if these things get worse.

05:53Okay. So just to clarify, the third point was about employment or wage growth?

05:57Yeah. I mean, the job market, the Trump administration and everyone else can't really

06:03control, right? That's just, you know, the Federal Reserve gave a very, very low bar. Now,

06:09we're arresting a lot more people now, ISIS again. So again, that with less people in the labor pool,

06:18assuming they work, you know, the Federal Reserve looks at that as, okay, well, we don't need big

06:24job growth anymore. Now, as long as the unemployment rate stays low, if the unemployment rate stays low

06:29and jobless claims stay low, they're okay on that front. So, but that's something that the White House

06:34really can't control. But tariffs and the conflict is something in their ball court that they have

06:44choices they can do. Let's talk about mortgage spreads because you talked about them. Where

06:49would we be with, you know, with, if the spreads hadn't improved? And do you think that that's going

06:54to protect us for the rest of the year? So, so rates don't go above seven?

06:57It should protect us for years unless the Fed gets super hawkish and does a rate height cycle, or

07:07we have a credit breaking somewhere where the whole market is being hit.

07:14I think some people are surprised that the spreads are still good because they thought the conflict

07:18would be the thing that really makes sense. That's not really how the spreads work. But

07:23man, mortgage rates will be near 8% today in 2023. We'd be seven and a half and over 2024.

07:30We'd be over

07:31seven and a quarter in 2025 last year. So, I mean, this is why I've highlighted the spreads,

07:39especially going into 26, man. Hug a mortgage spread because things could be worse. And

07:43where we are right now, man, you could really make a case that the 10-year yield should be higher,

07:49the Fed funds rate should be higher. And it's just, we're in that situation right now. But there are

07:54things that we should focus on and things that if they get better, bond yields should go a little

07:58bit lower on top of the aftermath of what Bessett is going to do after September 9th. And everyone

08:05else has game plan to try to get mortgage rates lower because the market can work with rates near

08:096%. 6% duration. We've talked about this for what, four years now. Every time we get near 6%

08:16with

08:16duration, sales grow, right? And things are just better out there. People feel better. But you get

08:23above 6.64, things start to slow down. Now, rates aren't above 7. That's a mortgage spread story. But

08:31hopefully people start focused on things that matter rather than gimmicks in terms of getting

08:37the growth rate of inflation down and getting the Fed to be less hawkish.

08:42I think, you know, we can focus on that, but like, it's not in our control. Now, you know,

08:47those two things might be in the Trump administration's control. You could even argue,

08:52I mean, tariffs seem like definitely, I don't know about the war. I don't know about the conflict.

08:57If you want the Iranian conflict over, you can get it over. You just have to do a deal that

09:02you

09:02don't want to do. Okay. Iran's economy is trash, right? It's not good. They need money, right? So

09:12the president doesn't want to do this. That's choice, right? So he's the president of the United

09:17States. It's his choice not to do a deal. So there's consequences with that. That's why I say

09:24that a lot of times I think people think of Rorsch and Besson and everything trying to do something.

09:28No, guys, inflation is above target. Nominal growth is still high. The unemployment rate's

09:34at 4%. Jobless claims are low and wage growth is above 3%. The 10-year yield in theory should be

09:40higher than what it is, but the Fed has not made that commitment yet to go to the next level

09:46of being

09:47hawkish where they tell the marketplace, hey, you can take yields even much higher,

09:52but it's a choice, right? It's a choice on what they do. We got in this conflict. There's

09:58consequences. We're in September. So you can make deals. It depends on if you want to,

10:07right? And that's, again, the ball is in our courts. It's not that like the Iranian economy's

10:13booming or anything like that. But when you go into a conflict and you think you could just get out

10:18of

10:18it really quick. I mean, oil prices aren't high, but it's just the Federal Reserve made this a hawkish

10:24thing. So hopefully some progress on that end. But if it isn't, then that's our choice. That's

10:32that we voted for this president and this is where it is. So he stands by that. So we'll see

10:39how that

10:40goes. The trade war with trade war, this stuff back and forth with Canada and everything, you know,

10:46you can move the dates until January 1st or everything, but it just adds another variable

10:53into the equation, right? So those things, if you could get those things to just head in a different

10:59direction, you know, and then get the Fed hawks to kind of believe in that you got something. But until

11:05then, I think a lot of other stuff are just band-aids and gimmicks at this point. And you

11:11don't need much, right? With mortgage spreads or where they are, rates just a half a percent lower.

11:17We saw what the data has done, but this is the reality of the world we live in. That's what

11:24the

11:24marketplace is saying. So when we go out for the rest of the year, probably less focus on Warsh and

11:30Besant, more focus on getting the conflict over and making sure the trade war doesn't get worse.

11:37So, you know, you're going to be headlining our mortgage banking seminar on October 1st here in

11:41Dallas. We are also going to have one of the MBA, the people who are on Capitol Hill all the

11:48time,

11:48come and talk to us about what it looks like. You know, what if the midterms, you know, if we

11:53have a

11:53red wave or a blue wave, how does that change the housing picture? And I would ask you, like,

11:59because you could, you could make a case either way. First of all, we thought the midterms would

12:04maybe have a quieting effect on some of these events. Like it was surprising that we went into

12:11the Iran conflict and that we started the trade war ahead of the midterms, just because, I mean,

12:15when inflation gets worse, when these are not popular things. But it's like, you could also say

12:21whether, whether you see a red or blue wave, Trump is, you know, he can't run again. So is he,

12:28is he just going to continue to do whatever it is that he wants to do?

12:32If you get enough seats, there'll be some more checks and balances. It'll make his life a little

12:39bit more difficult, but definitely, you know, if the Democrats take the house back, there'll be more

12:49pushback on a lot of things. There'll be more hearings and stuff like this. So I just, to me,

12:56I, I, I don't believe they would have Scott Bessett do what he's trying to do with bond yields.

13:03Holti eventually, when he announces the LLPAs, if they don't feel the pressure of bond yields going

13:09up where it is, and now we're hiking rates. Because it's not like, this isn't like, well,

13:14the economy's booming. It's nothing to do with Trump. The economy's on fire. So there's not much

13:19you could do. These are actions taken by, you know, our administration. So those are the things

13:25that you could alleviate, maybe going out in the next few months. And then on top of that,

13:31whatever Bessett wants to do or anything else, it'll help get yields lower. But, but now that

13:36we're here, you know, so much is already priced in, but, you know, things could get worse. You know,

13:45the Federal Reserve has just talked about just maybe a few rate hikes coming in. Boy,

13:49they can take the Fed funds rate much higher if they think that inflation is getting worse. So,

13:54so right now, don't make things worse. Find an end to some of these things. And that's the best you

14:00can hope for, for the rest of the year in 2026. It is interesting because you have been saying now

14:05for what, six weeks, a couple of months that Beth Hammock is sort of the, the markets see her as

14:11the

14:11Fed chair more than worse. And she came out yesterday, right out, we were talking when she

14:16came out with some things about like, we really need to hike rates right now. Yesterday and today,

14:21right? You know, the time is now to hike rates. Inflation probably be ending off at 3% at the

14:26end

14:26of the year. And her exact words today where we do it now will prevent more pain later.

14:36Again, I always go back to imagine if there's no COVID, no tariffs, no conflict, what will

14:43inflation look like? It would look a lot different. But I can't say that if the conflict is still going

14:49on and the trade war is going on, because those are the things that matter here. There's some

14:54inflationary pressures because just because AI spending a lot of money and, you know, electricities,

15:00prices are going up and data centers, but there are things that are in our control. So we can't

15:07complain about mortgage rates. If we're in middle of a conflict and we're doing a trade war,

15:13that's not how the rules work. You, you make those choices. And I urge people to, the reality is that

15:21the 10 year yield should be a lot higher with where nominal growth is. I just think the Fed is

15:26not

15:26ready to make that next commitment higher in fear that the labor market does get softer.

15:33So there, there is, there is a light to this tunnel. And now that Kevin Warsh has basically

15:38agreed with some of his Fed hawks people, one day at a time, but you got to make progress on

15:46some of

15:46these things. So if let, let's just say we have a, you know, we have a genie in a bottle.

15:51We can

15:52ask for this trade, this conflict to be over. We're still talking about best case scenario. We could

15:58get mortgage rates down towards six, right? I mean, no, no, no, no, no, no, no, no, there is no

16:04sick. The only time we've ever had mortgage rates get near 6% is that the labor market was

16:11getting noticeably softer in the bond market size. This is why I kind of want to get people off of

16:16the

16:16six thing because if you, the Federal Reserve made sure to everyone to know that they, they have very

16:24low break-evens on their jobs. So the bond market believes them now. So it would take, it would take

16:31the unemployment rate to rise and jobless claims to rise to get us down to six. And just remember,

16:37we did this in 2023. We did this in 2024. We did this in 2025. We did this in early

16:422026.

16:44All right. I mean, we had a negative job support. People were talking about AI taking the jobs,

16:49private credit. That's the only reason we got below 4%. We're so far from 4% right now because

16:57the Fed has raised everything up higher. You don't just get that back unless the labor market is really

17:04showing deterioration at this point. So do not think of six, think of six and a half to 6.75

17:10as the base

17:12that, you know, if you get some progress done, you know, you can maybe get to six and a half,

17:16but

17:17really kind of six and a quarter is the best case scenario, unless the labor market is noticeably

17:23getting weaker. That's a whole different equation there. But that's why I did that 6% mortgage rate

17:29AI with, you know, we've gone past that stage. So we have to think about, you know, unless the labor

17:41market is breaking, you know, six and a quarter to 6.75 really is the range now. Like if I

17:46had to redo

17:46the year with knowing what we are right here, that's what I would do with upside potential now,

17:52because if the conflict gets worse, so kind of don't, don't, don't think of 6% rates, uh, getting

18:00there unless, unless you really have the economy slowing down and the economic data getting weaker.

18:05Well, I hate to hear it, but I'm, I'm glad that you're setting the right expectations. Everybody

18:09needs to know this, right? For their business, um, for the rest of the year that you think this is

18:14the,

18:14this is the parameters we should be thinking about.

18:17When we wrote that article a few months ago about people should just think about 6.50 to 6.50

18:226.75% as the base. Now we've pretty much for the most, most of the part, uh, most of

18:29the time

18:29we've stayed here. We're a little bit at the upper end range because the conflict is, is still going

18:35on, but this looks right to me with where spreads are at, right? Remember we, we, we totally shifted

18:41the entire fed curve from rate cuts to rate hikes. And now, you know, the fed chairman, okay, I, if,

18:49if they're hiking rates, if the data doesn't get better, then I will go with them. And that takes

18:54some of the concern that, you know, the markets just won't look at him, uh, as a puppet. And we'll,

19:00we'll, we'll take care of that, but take care of the conflict, take care of the trade war, inflation,

19:06things that you can't control. If you want to do what Scott Bessett does, uh, September 9th, that's fine.

19:13Pulte's LLPAs, whatever it is, all that is positive, but these are the two issues here.

19:18Uh, uh, and we have to move forward with just that. And that's why I want to get people off

19:24of Kevin Warsh and Bessett and all that focus on the things that matter. Uh, and you could go higher,

19:30but the fed has changed the entire years, uh, uh, forecast and everything. They went hawkish

19:36and the market believed him and we've stayed up here. So it's not like we don't have getting to

19:41neutral policy with two to three rate cuts anymore. That's over, right? So it's going to take a lot

19:46more work to get, to get down there. Has your, uh, fed rate hike, uh, over under changed? What do

19:53you think? Yes or no? You know, I, I, the jobs report for September, uh, uh, is going to matter.

20:01I,

20:01I can get you two more people that I think we'll, we'll call for a hike. I'm not sure if

20:06we

20:06could get four if the labor data is softer. If the labor data is fine, then, you know, uh, uh,

20:12uh, September is in play, but, um, there are a few members that are just not quite

20:18on board with maybe the, the, the hawkish take in terms of just, Hey, let's just wait and see how

20:24the conflict happens and how the, uh, uh, uh, tariff inflation winds itself off.

20:30All right, Logan, thank you so much for walking us all the way through that. Um, appreciate you as

20:36always. And we'll talk again soon. Pleasure.

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