Fed week preview and mortgage rates

Name: Fed week preview and mortgage rates
Uploaded: 2026-09-15T08:00:30+00:00
Duration: 24 min 48 s
Channel: HousingWire

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

00:16the Iran war, mortgage rates, and housing data. Before we dive in, here are the top

00:20five trending articles on housingwire.com. First is the tracker. Housing market faces

00:26headwinds as mortgage rates move above 7%, followed by Colorado river water cuts are coming.

00:32What will they mean for housing? Then we have DSCR loans are booming amid fragmented underwriting

00:38standards and seller impersonation fraud more than doubled since 2024. Finally, we have Airbnb

00:45pledges $250 million to jumpstart stalled housing projects. Okay, we are ready to dive in. Logan,

00:52welcome back to the podcast. It is wonderful to be here and Sarah Wheeler, 30 seconds ago,

00:58make sure to let me ask questions. Yes, ma'am. Sometimes you have a lot to say, which is good,

01:04but I also have a lot of questions. This is a big day. Oh, yes. Today, it's funny because we

01:10the last

01:11podcast was talking about how the next three and a half months could, you know, the framework for 2027,

01:16the oil prices were up, 10 year yield was up 10 year yield got about 5%, which means when it

01:21goes

01:21below 5%, we bring out the photo, I survived the 5% 10 year yield. And I brought this up

01:27in 2018,

01:28whenever the 10 year yield got above 3%, all the doomers went out, it's over America's, you know,

01:33and to toughen men up in America, we thought that every time it goes below, you see, you don't have

01:38to be so afraid of living in America anymore. Like back in the 1800s, like people used to die of

01:44pneumonia, people died very young. I mean, there was all these, it was very hard life back then. But now

01:49you're living in your single family home, you have 2G internet access, you have air conditioning,

01:55come on, man, toughen up a little bit. Okay, but if you're in the mortgage industry,

02:00these rates are not good. They're not good, but the country is still alive and ticking. And we're

02:06still going to have near 5 million total. This is what I always tell people, we're still going to have

02:10near 5 million total home sales. And the peak in the last decade from 2010 to 2019, with three and

02:17a

02:17quarter, 5% rates, rates for a hold was around 6 million. So we're going to make this, we're not

02:25going to, it's not going to be a total destruction of the US. In any case, those are, it's really

02:30middle-aged men podcast, stock traders, I'm making fun of. Very interesting morning, Sarah.

02:36Very, very interesting morning. The 10-year yield got to 5%. When we, I'm so glad we did that podcast

02:43a

02:43few weeks ago, talk about, hey man, things could get worse with rates. If this, this, this thing,

02:46this oil chart doesn't look good and escalation and all that. But even back then, like early July,

02:53it's hypothetical. It said the worst case I could get for rates. And that means a 10-year yield is

02:57hitting 5%. With 37 to 43 basis points higher from the peak forecast of 2026, which was about 713 to

03:04718. I think this morning we were at 717, which means like we've done all the time in the last

03:11three and a half years. When rates get below 6.4 and head toward 6, demand picks up. When rate

03:17gets

03:17above 6.64 and heads above 7, demand slows down and we go nowhere. And this is, 2026 is another

03:24year

03:25that's going to be like that. The velocity of data isn't big, but all of a sudden the 10-year

03:30yield

03:30fell, like went down five or six basis points. So what happened? Was it best then? Was it anything?

03:35Trump came out and said, oh, Russia and Ukraine promised not to attack each other anymore because of the

03:40energy facilities or getting hit and diesel prices are up. Ukraine said, okay, we'll do it. I don't

03:45know if Russia will do it. And Trump says, I'm open up to a deal with Iran, right? Iran, 30

03:51seconds

03:51later said, oh my God, we're not doing this. Whatever it is, it brought the 10-year yield lower.

03:57Last time I checked, it was like 494, 495. In any case, we're up here still. So we know what

04:03needs

04:03to happen to get things better. The question is, can we execute on any of these things? And that's what

04:10we

04:10should really focus on for the next three and a half months going into 2027. If you're looking

04:14out for mortgage rate direction, because we know what the issue is here and we just got to be able

04:21to find a way to make it better. It's crazy how those headlines can just, I mean, it goes up,

04:29it goes down just based on what comes out on a Monday morning. Well, following a pretty wild Sunday

04:36night, you know, we knew that this morning was going to be interesting. Anything surprise you?

04:42No, I mean, the so-called deal, not deal, but the meeting between Gulf nations was the reason why

04:48oil prices fell Friday morning, even going into the CPI report, which, you know, baked in the rate

04:54hike to happen. And then oil started to perk up a little bit Friday afternoon and perked up a little

05:00bit this morning. And then the news came and I mean, oil prices are still slightly higher right

05:06now. So there's some deviation from the 10 year old oil trade today. But, but I imagine you guys

05:12have to remember this, like Iran, Russia, and China are our enemies. They can't really like fight us in

05:19war, but they're probably all working together to make the midterms as bad for president Trump as

05:25possible. And I mean, China is such a big player in the oil markets now that, you know, we've talked

05:31about this. I mean, they've been holding back on purchasing. There's, I mean, my, my fear again,

05:36with that oil chart breaking out is that they're all going to work together and do something right

05:41before the midterms to make this very problematic. And then we, and then in their ways, they see that

05:47as victory as Trump will lose more seats in Congress. Cause we have two year political cycles.

05:52They don't. And that's always the problem when doing something like this is that, you know,

05:58they get to play different rules. There's political consequences. We're trying to do this. That is

06:03inflationary. No politician really survives inflation bursts over the last 2000 years and

06:09always a polishes and thinks they can get away with it. Uh, Trump at least tried to like take over

06:14the federal reserve and bring oil prices out, but the whole Trinity trade backfired on him this year.

06:19So tough, it's harder. I mean, you know, like you're JD Vance right now. What are you going to

06:25talk, talk about, you know, running for president? Oh, we're going to do more tariffs. We want the

06:28dollar to go down, you know, all this. So whatever this is, the next three and a half months is

06:33just

06:33going to be very interesting. Okay. Well, let's, let's talk about the fed meeting this week,

06:38right? What a backdrop. Um, and we have seen over the weekend and then this morning,

06:42Trump doing another full court press on the fed specifically worse and talking about how,

06:47you know, rates need to come down and, you know, uh, people are like, Ooh, that's going to,

06:51this going to be wild. What are your thoughts here? So Trump is always going to say we need to

06:56have the lowest interest rates out because we're credit worthiness. That's not how monetary policy

07:02works. That works for applying for a mortgage, right? But it doesn't really work here. Um, and I

07:09just think he says that I, I think the whole takeover of the fed, you know, backfire, just remember

07:16it was always going to be Kevin Walsh, right? Kevin Walsh was handpicked a long time ago for this.

07:21So he's running into trouble because Kevin doesn't want to talk a lot. And then he was trying to do

07:26this task force and all these things. And he talked about it where we need lower rates for mortgage

07:31industry or, you know, or housing, but you know, the, the policy isn't restrictive for the economy,

07:37but for house, the problem is this conflict has created a variable chaos that it's very difficult

07:45when the fed chairman doesn't talk, but Beth Havoc, homegirls out there, we need to, Beth Havoc's

07:52like every, every six hours, she's itching to write something on LinkedIn about, you know,

07:56how we need to raise rates, you know, raise rates, raise rates. Or he's like, I'm going to do a

07:59whole

07:59little thing about raising rates. Lori Logan, Neil Kashkari, and a few other fed people are really

08:05starting to sound more hawkish. And the fed chairman is. So a difficult time for him to do

08:14this in this environment. Again, if it was like Mitt Romney or Paul Ryan, like Kevin Walsh would

08:20be a perfect like fed chair for him. But in this, you know, this is what we have to deal

08:26with.

08:26The market's already priced at a rate hike. That's not, that's not going to be a shock. It would be

08:30more

08:30of a shock if they don't hike at this point. So, but again, that's who cares. We know what the

08:38market is going off of. Mortgage rates went from 5.99 to 7.17 without a rate hike. We've had

08:44many

08:45times where mortgage rates go from, you know, seven and a half, seven and a quarter down to near 6

08:49%

08:49with no rate cuts. The bond market does its own thing. And the bond market just doesn't like this

08:54oil trade. But if you can get something done, you know, and it's so much, it's less about the fed.

09:02Now it's more about this, that it's, it's weird to say that, but I mean, this is true because the

09:06market just thinks we're going to have another rate hike cycle. So the goal is try to limit in the

09:12damage as much as possible. And you have to find a way to get the conflict over. Don't make trade

09:18war

09:182.0 worse. And then let the chips play because you can't do anything about AI, even all this news

09:23over the weekend about AI, and we're going to slow things down and the money's already there. It's

09:28going to be spent for the next few years. So that, that is something you can't do about the labor

09:33market. Whatever people think about it, the unemployment rate is still low. Jobless claims

09:37are still low. Nominal growth is still good. Wage growth is slowing down. The fed probably likes that

09:42one more than anything else, but there's, there's things you can't do anything about, but there's two

09:46things that there's something that can be done by a human being, you know, uh, and, uh, uh, the,

09:52the fed meeting, we'll, we'll see how hawkish they sound. I don't, I don't know. We we're still trying

09:57to figure out how much is worse going to talk, but no more dots eventually and all that stuff. But,

10:01but man, what a time for him. You know, he thought it was just going to coast kind of in

10:07here, but,

10:07you know, do you think that, um, he will, because we, we know we expect the, the fed generally to

10:14vote

10:14for a rate hike. Does he come in and vote for a rate hike and, and risk Donald Trump being

10:20mad?

10:20Or does he do something pretty unprecedented, which is vote against the rest of the fed?

10:24So I hate to break it to everyone, but Kevin and Donald talk to each other all the time.

10:29Okay. So I don't think, I don't think Kevin Warsh is worried or anything. I think those two are

10:33talking all the time and, you know, Trump is going to say something. I mean, I think I remember when

10:38Trump said something, I told Putin, Hey, listen, I need to be tough on you, you know, for the media.

10:44So whatever Trump says, Kevin is his guy. This isn't Christopher Waller. This isn't Yellen.

10:50This isn't Powell. This isn't, Kevin is his guy. He might put more focus on other fed governors for

10:56the rest of the, you know, two and a half years, but Kevin and those two are, so nobody, nobody

11:03feel

11:03bad for Kevin. If, if Trump says anything, cause I think, you know, if there is going to be focus,

11:08it's going to be Beth hammock. It's going to be Neil Kashkari. It's going to be Lori Logan.

11:13All the voting members of the federal reserve that are still out there next year, the smirk of

11:19Austin Goolsbee will definitely be someone Trump will go after. But until then, that's just,

11:24this is, don't worry about Kevin. He's, he's good.

11:26Every time you say the smirk of Austin Goolsbee and people watch, I laugh. I don't know why.

11:31Every time you say that, it makes me laugh.

11:32All of you, listen, for when people say this, go, go type in Austin Goolsbee and go to his image

11:37on Google. You'll know exactly what I'm talking about. Homie just smirks all the time. It doesn't

11:41matter what he's even saying. So I've said the smirk of Austin Goolsbee, you know, and people do it.

11:46They go, Oh my God, you're right. I said, why do you think I say it all the time?

11:52Okay. So from your perspective, doesn't matter what the fed does in some ways, like it's not

11:56running the show. This is the, as long as the oil 10 year yield trade is, is so prominent,

12:02it doesn't really matter. But again, we, we are priced in so much. We're so, uh, uh,

12:07we're so elevated. Just remember the last time the 10 year yield was here in 2023, we had all the

12:13rate

12:13hikes in, we had no rate cuts being discussed. The fed funds rate was much higher. Um, but again,

12:19with nominal growth, where it's at, with the unemployment rate at four point with jobless

12:24claims, low deficit spending, CapEx spending out here again, we're Skynet is winning. We're building

12:31for Skynet. Like we're not doing what we did in the matrix where we have a bunch of babies and

12:36put them

12:36in tubes and humans are the energy. So we're literally, we're literally building like 5,000

12:43years from now, some alien life is going to come down and they're going to look at us and go,

12:46these jackasses built the entire Skynet energy field out there. And they took it over and they're

12:51like, what happened? You know, we can't like shoot the sky in the darkness that gets dark and energy

12:56is low. We build out the system out there. So all that is still in play. So there's things you

13:02can

13:02control, not control. It will be interesting to see how forward looking goes, but to

13:06me, as we talked about months ago, the Fed Hawks won. They were winning months ago. They got the

13:12easing buys out, two year yields up, three month is pricing in, 10 year yields up. The Fed is getting

13:18restrictive policy as much as they can control, like the things they can do. They can't cut spending

13:23or anything out here. But, and then you got Scott Bessett, I am the house. And I always think of

13:29Bain, just think of Bain right behind him. And Bessett wants to punch everyone out, but he can't

13:33really punch Bain out, you know, though I think, I think Scott's bigger than, than Bain, the actor.

13:38In any case, here we are. This is what we have to deal with. As soon as it's going to

13:44be October,

13:44you know what happens in October, we're going to get all the Halloween AI things out there going.

13:49It's going to be, it's going to be interesting. It is going to be interesting. Okay. So keep an eye

13:54on

13:54the oil, oil chart right now is really key to the 10 year yield. Are we at your level? Are

13:59we just a

14:00little bit above your level of what you thought? I do not have, I did not. When I said worst

14:05case

14:05scenario and that things could get worse at this conflicts, I, the 10 year yield was 5%. That was

14:10it for me. And I said, 713 to 718 is the worst. Oh my God, the spreads. Sarah Wheeler, when

14:18we did

14:18the spreads data, that was the widest spread gap in the last few years, or since we've incorporated

14:25it into the tracker, mortgage rates, just to give you guys an example today, where, where the spreads

14:32are in 2023, mortgage rates would have been 8.36%, the worst levels in 2023 today.

14:38With the 10 year yield at this level. And then you're like, okay.

14:41And the spread gap. Yeah. Cause the spreads actually came down again, how we, how we track spreads.

14:46We would have been at basically 8% in 2024. Last year, even last year, if I took the worst

14:53levels of the

14:53spreads last year, we'd be closer to 8% today, you know? So when people visually get to see that,

14:59they get to, they get to understand why I've talked about so much, but I wasn't planning on

15:03the spreads being this wide and giving you that much protection because the 10 year yield had 5%.

15:09You know, it was more or less that we don't need the 10 year yield to really, you know, get

15:14below 4%

15:15to have rates near 6%. Not that we're going to prevent, you know, that happening. So I think the value

15:21of

15:21the spreads on the upside is get to be seen today, just as much as it was on the downside

15:26out here.

15:26And a really good example was that mortgage rates got like 612 in 2024, but the 10 year yield was

15:32at

15:323.62, you know? So, I mean, we, we're, we are at five and a half percent if with the

15:39spreads this

15:39year, if that was the case. But man, talk about me, homies, it could be a lot worse, but hug

15:46a mortgage

15:47spread. But right now, I mean, that's as all as I can do is I thought if we hit the

15:515% tenure where

15:52the spreads are 713, 718, we're 717 today. I don't know if we get a repricing lower because

15:58mortgage rate or the 10 year yields falling, but it gets very interesting. If it gets worse than

16:05this point, you could clearly see Trump is hearing it on both sides because of diesel prices and

16:10everything. Truckers are mad out there. They're saying we doesn't, we can't make any money with

16:14diesel up here. And I am just worried that he, he thinks maybe Putin and Trump are these people.

16:20They're all working together. Maybe they're friends. No, I'm worried that they have something

16:24in plan for the midterms and it gets worse, right? That oil chart doesn't look good to me

16:30after a few weeks ago. And I'm like, oh, there's a midterm coming up and all these people, they're

16:36working together. That's why they're bricks. So we as a country can handle that. Like our economy

16:41could handle it better than anyone else. But politically speaking, it's, and I think that's

16:48part of where Trump was told probably that, you know, the whole thing is just to make it worse for

16:53the midterms. Interesting. And of course we have the precedent that we've seen with Iran back all the

16:59way to Jimmy Carter, right? They, they decided to extract as much pain as they could with the

17:05hostages waiting until Reagan got in. And so they know how to do this. They've made it plain.

17:10They're going to do that if they can. Two-year political cycles here, they don't have them

17:15anywhere else. And though at least countries like that. So that's the, that's the advantage they

17:21have. And it's a disadvantage if a politician wants to really get aggressive with something

17:25in a two-year political cycle out there where he'll lose some seats or he'll lose the White House.

17:32But the one good thing going on in the future is that, you know, try to convince Americans on the

17:37lower dollar tariffs and, you know, conflict in the Middle East going out in the future after this,

17:43you know? So I think this is, I think if you're JD Vance and you did all these videos, we

17:48need a

17:49lower dollar. We did, you know, again, the Trinity, the whole Trinity thing we talked about is if Trump

17:53is going to really try to do this, he does need energy prices lower and mortgage rates lower.

17:58You could offset whatever comes in, but the whole thing backfired, you know, in the midterms here.

18:04So there's consequences to actions and this is, this is one of them.

18:08So part of those consequences are higher mortgage rates and in the tracker for last week,

18:14we started to see that. I think your, your headline there was like basically the housing

18:20markets facing headwinds because rates are over 7%. What did you see in the tracker?

18:25Yes. And last year was all about teaching people how the two weeks, you know, around a holiday,

18:30things are going to get tainted. Inventory was down, but the year over year growth is about 1.6%.

18:36So not much velocity on inventory, but the week before the holidays last year was a week before.

18:42So it tainted the inventory. So it was 4.39% inventory growth. Now it's 1.6. So somewhere

18:48in between there is where we're at. New listings, data fell noticeably, pending sales fell full note.

18:54This always happens. I do believe that part of the pending home sales is not the weekend related

19:00because every time rates above 6.64 and then head above seven, we see that slowdown. Really good

19:06example. 2023, when mortgage rates went from 7.27 all the way down to 5.99, we had 12 weeks.

19:14Remember

19:14the November 9th, 2022 thing, all that, you know, the forward looking data got better. And if as soon

19:19as we get down to 4 million, home sales should stop crashing. We had one of the biggest month to

19:25month

19:25sales prints in US history. It's like back then it was 500,000. I think they revised it to about

19:29430. But then rates went up to 7%. That was it. You know, that was a peak of sales. The

19:34same thing

19:34happened in 2024. We had, we had a couple of months of rates going lower. We get a couple hundred

19:40thousand and then that's it. So we just follow the same play playbook. I mean, we, this is always

19:46happens except the velocity of the sales data. Is it, is it that, isn't that big because, you know,

19:53we're really kind of at the same rate ranges last year. Last year, we were seven and a quarter to

20:016.12, you know, kind of, uh, uh, uh, last year, this year we're 5.99 to 7.17. So

20:07it's, it's kind

20:07of the same exact range we did, uh, last year, even though the 10 year yield was so much higher.

20:13Uh, so then we just work off of that and then rates have to get that. But the thing is

20:17that

20:17we know where we have to go to get there. And the benefits of the last two years is that

20:24home

20:24price growth is adjusting to inflation is negative. Wages are outpassed. So housing affordability got

20:31a little bit better on its own without rates. Uh, uh, in 2023, that wasn't the case. Uh, even though

20:37mortgage rates went from six to 8% inventory was still too low. Home prices were up 6% that

20:41year,

20:41but this year we're, we're up one to 2%. Maybe my forecast gets correct down negative

20:47to 62. Uh, uh, yeah, down 0.62%. It's going to need some help. We're very late in the year

20:55for

20:55that to, to, to, to get, to get too much help on that. But whatever this is, housing is in

21:00a,

21:00just a healthier spot because active inventory is up. This is one of the things when I go on TV

21:05a lot,

21:06I tell people we're up here, there's no more shortage. So we don't have to worry about prices,

21:09take it off anymore. Now, of course, housing starts and permits aren't going to go anywhere or anything

21:14like that, but you don't have to worry about home prices crashing 30 or 40%, but you don't have to

21:19worry about home prices growing above, uh, wage, wage growth right now. And I think that's,

21:24that's the healthier aspect of this foundation year for the last 24 months where it was different

21:29than before. Of course, during COVID housing was severely unhealthy. So I don't have to bring that

21:35up anymore, but you can see that you can have rates even get down to 6% and not have

21:39prices take

21:40off anymore in that, in that manner. So much more healthier backdrop and you get to see it in the

21:46velocity of data out here. And, you know, like we can see rates get up to 7% people go,

21:51there's only

21:511.6% inventory growth. I said, well, we're almost back to normal, normal, like on a historical basis,

21:58while there's no shortage argument from here where inventory is, this is, you're not working from the

22:04all-time lows anymore. So don't get shocked if you don't see these escalating because what happened

22:09from 2005 to 2007, when active inventory, the NAR was at two and a half million, it went vertical

22:15to 4 million. Now here we are, this is the, whatever, the fourth calendar year of the lowest

22:21home sales ever. NAR's inventory is 1.62. Home sellers do not act like middle-aged men podcast stock

22:29traders to sell to be homeless. So you don't get this velocity of this day. There's no surge of inventory

22:35coming or new listings data. This is why we always stress the new listings data. All these

22:40fraudulent grifters who are talking about foreclosures and everything. And here comes,

22:43you can see it in the new listings data. It's nothing's happening, right? This is why we believe

22:48in reading. Reading is a good thing. Reading is a good thing. History of human civilization,

22:52those that read books instead of burning them. Well, this is a good, I mean, talking about how the

23:00housing market is healthier this year, at least in some aspects is a good way to end the podcast

23:06because there's a lot going on that feels very negative. And it's like, let's remember there

23:10is a backdrop that it is healthier in some ways, home prices, inventory than it has been, but it's

23:17still a rough time. I mean, of course things would have been better if rates get near 60. It's just

23:23really hard with Fed policy where it's at, you know, but unlike 2023, where home prices were up

23:306%, there's not much happening over time. This is, if you go back to the 80s, if you go back

23:36to 1986

23:36to 1990, there's periods of times where home sales don't do anything, especially in 86 to 91, home sales

23:42were declining for that five-year period. But when you have an affordability issue, you can't have prices

23:48rise like they've done. You know, you have to get it fixed one way or another, but you know,

23:52as good as you could possibly imagine what's the last 24 months. Now, if home prices were up 6%

23:59again this year, I'm not, we're having a different conversation. I've got, there's nothing gained

24:02here. This is not a good thing. You affordability didn't get any better, better, but last two years

24:07you got that benefit. Did you, were you able to ask enough questions? You know, I always have more

24:14questions, but I think we had, we covered a lot of ground as always, Logan. You didn't point your

24:18finger this time. So that's good. And that happens. I'm not even, I'm not even aware of

24:23it sometimes until I realized. Oh, Sarah, I had that impact on people. Just, they don't know.

24:28They're like, you know, it's half the time people got axes and ready, you know, they're, oh, I don't

24:31know why I have a finger. No, I appreciate you so much. And we will talk again soon. Thanks, Logan.

24:37Pleasure.

Fed week preview and mortgage rates

Category

Transcript

Recommended