Quick question for the loan officers. How are your relationships with past customers? Retention matters more than ever, and your instincts and hustle will only get you so far. Earn more repeat business with Total Expert. Learn more at totalexpert.com slash loan dash officers. Welcome everyone. My guest today is lead analyst Logan Motoshami to talk about the war escalation and what that's doing to mortgage rates. Before we dive in, I want to thank our sponsor, Total Expert, for making this episode possible. Logan, welcome back to the podcast. It is wonderful to be here Monday morning and it's already crazy. Wheeler, it just doesn't stop, man. Until this war is over, really, you just can't get any clarity on any kind of outlooks until you get a real ceasefire and a real deal to get things moving again. Okay, so what happened this morning as far as the markets? missiles were fired jets are being sent out the uae got attacked the uae wants to attack iran our warships were targeted you know so everything in terms of trying to get a ceasefire or you know trump wanted to you know have security detail in a sense for boats to come through it just escalated this morning so what does that mean oil prices up brent is you know near yearly highs and the 10 year yield is almost back to the yearly high as well. We're almost at 448. I think the last time I saw it, we're about 445, 446. And every day that goes on, you're starting to wind yourself down to where the reserves are gone. The Federal Reserve is out there. A lot of the hawk people are really pushing that the next move should be a hike, not a cut. So this is now past the four to six week period that was originally planned for it. And now we're going into what I'm concerned about always is a unforced error escalation, no progress, all hell just breaks loose. And we're in a different spot right now with oil reserves to have all hell just break loose. When we had Godzilla tariffs, you noted last time on our podcast that when the 10-year-old got to 450, that was sort of an alarm bell for the White House. My question is, even if it is an alarm bell, and so they were able to pull off some of the tariffs, they changed tactics. Even if this is an alarm bell for them? Do they really have, I mean, what can they do that would be definitive to make this seem like it was over? They don't have all the cards on this one. Iran has home field advantage with the straight. So it's a little bit more difficult with tariffs. You can say 300% tariffs on Friday night and call it off on Sunday. I mean, if Trump really wanted to, he could end this and just, you know, declare military victory and, you know, move on. But we're not at that stage. And whatever progress is being done, we got to remember, there's probably also internal conflict with the Iranian government between their military and others in terms of who's really in charge. So it's a lot of drama. And it's one of these things now it's pushing rates. Now, on a positive side, last time we were here a few weeks ago, mortgage rates were at 6.64%. Today, they're at 6.52%. The spreads are a little bit better than they were earlier in the year. But as we always say, hug a mortgage spreads because in 2023, we're closer to 8%. 2024, we're 7.5%. In 2025, we're over 70%. So we're still kind of under that 6.64 level, but there's limits to what the spreads can even do here when policy, the bond market is trying to make things a little bit more restrictive. The 30-year is above 5% today, which rarely happens. So we're kind of almost to the limits to where I can go with the 10-year yield at 450, 460. Anything above that, you need the Fed to start talking hawkish to guide the 10-year yield higher. But we're just in one of those phases that do you really want to do that with higher oil prices, higher gas prices, higher rates and everything? This is the conflicted side of the Federal Reserve. If you try to get too hawkish or try to get more restrictive, that'll impact demand. So it's one of these things where, man, if this conflict just didn't happen this year, mortgage rates would have been probably still under six and a quarter right now. The labor data is improving in the sense that it's not getting worse. So it's just that this escalation can get worse. That's my concern, that both sides are frustrated and somebody does something that even makes it worse without making it better. We do not need that, that's for sure. Okay, so one of the things I feel like we hear all the time like oh the Fed talking hawkish Now they talking about hiking rates Like if you out there and you running a mortgage business like how real is that to you The idea that they would actually hike rates in the near future So you need more votes for rate hikes Just like the doves don have enough votes for rate cuts the hawks don't have enough votes yet for rate hikes. So right now we're kind of in between, but I would tell you there are probably more hawks than doves. There's probably not enough voting hawks to get a rate hike in. But in a sense, the 10-year yield rising and the 30-year yield rising, the two-year yield, they're already pricing in no more rate cuts. So in a sense, it's a de facto tightening just by itself right there. To get Kevin Warsh and everybody to unilaterally all go in for rate hikes, something terribly went wrong. And again, we're getting closer to the midterms. And it looks like just we don't know how to close this. And you have two parties that can escalate this even more. I'm concerned that the Federal Reserve will do what they kind of do. They see oil prices going up, embedded inflation, and then they hike, and then the economy gets hit in that regard. So one day at a time, but we're in May now, and this is still going on. And reserves are dwindling, and we have a lot of headlines that say this is going to happen, that could happen, then things switch. I think the Iranians are trying to do what Trump does, is say something to talk the market up in terms of oil prices going up to add more pressure. So it's a unique kind of war because a lot of it's done on social media. They're trash talking back and forth too. I'm sure Washington and Napoleon and the old generals of the past probably are thinking, what the hell is y'all doing out here? But this is the world we live in. So our focus is on the economic side. Thankfully, the spreads have improved a little bit or mortgage rates would even be a little bit higher today. But we are getting close to that kind of peak level or 450, 460, I thought is high as you can go. You get past that, something really went wrong this year on the rate side. Congratulations to the winners of the 2025 Exhibit Awards presented by Maxa Designs and Housing Wire. Chosen from a record-breaking pool of finalists, these brands are redefining what it means to stand out in real estate and mortgage. From visual identity to client experience, they're proving that great branding drives real results. See the full list of winners and what sets them apart at exhibitawards.com. So we are going to talk about the tracker, but before that, I wanted to ask one more thing. What we're seeing a lot of is chatter out there is like, oh, the Federal Reserve buying, you know, doing quantitative easing and how that might help this situation. Just clear that up for us. Okay. So this is for all realtors and mortgage people in America. The Federal Reserve is not doing QE. They're not buying bonds to drive rates slower. Okay. Whatever they do on the operational side for the repo market is not bringing rates lower. So we have a housing wire website. There is a mortgage tracker in there. We talk about mortgage rates every day, what can drive it. There has never been a word by me, okay, about the Fed is doing QE. Also, if the FHFA is buying mortgage-backed securities, that's not the Federal Reserve. There's a lot of stuff out there that just doesn't make sense. And I'm afraid that a loan officer and a realtor are listening to some jackass on YouTube saying something that doesn't make any sense. And the Federal Reserve has made it very clear. They have no intentions on ever doing QE like they did in the past, unless you have zero interest rate policy. We are nowhere near zero interest rate policy. So everyone's going to have to get that out of ahead. The war sending oil prices with inflation is bringing mortgage rates and the 10-year yield higher. The spreads are better this year. That's kept things somewhat in check. But those are the things that drive the 10-year yield day in and day out. Not QE is happening right now. That's not even a thing. I think that's a great clarification because as you said, people are like, oh, Fannie and Freddie did this. It's like two different things, two different outcomes. As you noted at the time, that was a defensive move. That was great for mortgage rates. I'm glad that happened, right? But that's not the same thing as QE. No, no, no, no. I think people get the FHFA and the Federal Reserve mixed up sometimes. And it's just, listen, there's channels, there's waves, there's economic data. Those are the things that really move this. Fed policy has a lot of rate cuts in the system now. So there's a fight between should we talk about hikes or cuts, right? So those are the things that matter, not some speculative theory that rates are going to go lower because the Fed is buying. No, not the case. Okay. So you mentioned spreads several times there, And that was the focus of the tracker this week. As you said, every Saturday, we have fresh data every Friday. Friday night, you spend looking through it. You write the housing market tracker, which can be found at housingwire.com. Under the news tab you can just go down there and click on it for anybody who wants to read it because you have all your charts there And some of those charts just make it so clear what you saying They amazing But that what you focused on this week which was like the difference that the spreads are making So maybe talk about what you're seeing in the tracker data. So we are talking about where we close to 8% mortgage rates. If we had the 2023 spreads, we are like close to seven and a half percent mortgage rates. If we had the 2024 spreads, we are over 7% mortgage rates if we had the 2025 spreads. So this is why we hug a mortgage spread. Weekly pending sales, calendar week, multi-year high. Inventory growth is now down to 2.33%. We had a small decline week to week. The trend is we're going to have some negative year over year prints on the inventory data. But just remember that we're at an elevated level from the terrible levels of 2020 to 2023. So there's a lot more supply. Price growth is in check. So even though inventory is going, it's not like prices are about to take off or anything like in that. The supply demand equilibrium fixed itself on the inventory side. We're just not escalating out of control like some, you know, doomer accounts have been talking about. So inventory growth is now at the lowest levels we've had on a year over year basis. Also remember the comps are going to be very hard until mid June. Last year, the peak was about 33%. Now there's a lot of places that are down year over year, but the growth rate is now down to 2.3%. And you slope with a curve, Sarah Wheeler, that's what we do. So inventory is still growing. It's just not growing as fast. It's just not growing as fast, especially as some people thought. The housing market shifted when, Sarah? Mid-June. Mid-June of 2025. And we said it's going to take six to nine months for people to figure it out. I think hopefully there are some people that even if you're the biggest doomer in America, planet Earth, you're like, you know, the inventory data isn't really going vertical now. And we always said it takes six to nine months for that to kind of seep in until where people can visually, I suppose if you're blind and you can't read or you're deaf, might be a problem. But outside of that market change back then, the rate construct is still in a workable phase. I mean, it is a shame that what we had at the start of the year with six and a quarter under no volatility, we would have ran a couple hundred thousand home sales easily. But even with all the drama and all this crazy, the spread has kept the rates good enough where we still have a housing demand intact and sales can still grow for now. But again, we are getting closer and closer to that. When we get past 6.64 and head to seven, that becomes an issue for the marketplace. But again, with spreads being as good as it, it's hard getting rates over seven because it's hard getting the 10-year yield over 460 with where Fed policy is. So a good tug of war. But again, we're still working off of these Monday headlines and Sunday nights and weekends. And the focus is all going to be on this, where we should be focusing on the economic stuff. And that's why clarity and getting this situation resolved, then you could get these Fed hawk members stop tycos. All they want to talk about is the war keeps on going on. We need to hike rates. We need the hike rates. We got rate hikes priced in now in 2027. So this has gone long enough to where people are looking out. And that's the reality of embedded inflation out there. So hopefully this thing will end soon and then we can move on. But until then, this is the marketplace we got to deal with. We think of a spring home buying marketplace, right? That this is just like seasonally when people are generally looking to move, they can sell their house, whatever, before the school year starts. When we have all of these kind of factors going on, does that sort of push it? Like, in other words, maybe, you know, if the war ends that, oh, we see June pick up, or does the seasonality really run things? I've never cared for the seasonality of things because of this reason. If you look at the last 15 years, the best monthly sales prints we've had were in winter. Interesting. Even with us, when we created the tracker, we wanted the tracker to be a forward-looking guiding demand curve and supply-demand equilibrium data line. So what happened is there's been three times where they changed positive. Late 2022, November 9th, you remember that date? Mid 2024 as well. Mid 2024 was a little bit confusing to people because purchase application data was negative year over year, but our forward-looking tracker was getting better. So we said, go with the week-to-week data over the purchase apps. We had a couple hundred thousand more home sales then. And then last year, starting in mid June 2025, we grew sales to a nine-month high in December and then holidays happened. Then that storm happened. Then the wars happened. But even with that, we're still, you know, kind of intact for growth. But man, if we just hypothetically speaking, let's just say that the war is over and the Fed starts talking a little bit more. 10-year yield goes down a little bit. We're under six and a quarter. We could have a similar kind of second half of 2026 like we did in 2024, 2025, and late 2022 as well. That February print in 2023 was one of the biggest month-to-month sales prints ever outside of like the COVID crazy data So we can grow sales from that The seasonality is always there with I mean you can see it in our tracker data our weekly pending sales new listings everything pricing all that stuff moves with the seasonality but you can have higher existing home sales prints in the fall and winter So one thing you always look at is new listings. And during this time of the year, you want to see new listings between 80,000 and 100,000 per week for several weeks, right? We have not been able to get that last couple of years. Where are we on that metric right now? So last year we got about 83,000, but we got that kind of later in May. and then that was it. Just one week? Yeah, we would get it for one week, we'd come back down, we'd go above 80,000, come back down, and then that was it. This year, we got about 83,000 a little bit earlier. Last week, we had a dive. Sometimes the new listings data has just this weekly curve, like a lot of housing data on a week-to-week basis. So some people should be a little bit careful on reading too much on the week-to-week stuff on there. But I'm hoping that we could just get the new listings data back up above 80 and just at least get two weeks. Just give me two weeks above 80,000 and I'll take it as a victory because it was, you know, in 2024, I thought we could get above 80,000. We didn't. We were at 5,000 short last year. I thought we could get above 80,000. We did, but we didn't have any growth. So this year, there's still a chance of us to get growth above 80,000, at least back-to-back weeks or something like that. Again, small steps, we're moving our ways somewhat back to normal again, and most sellers are home buyers. So that to me is a positive. And just for everyone's context is key. Our new listings data normal is 80 to 100,000. It's actually been rare to get above 100,000 over the last 10 years. But during the housing bubble crash years, this thing was running at 250 to 400,000 per week for years. I can't even imagine. That's crazy. Even the seasonality low point in December or January when nothing happens, that market was so stressed that if I took the highest new listings in the last five years and doubled it, it wouldn't even reach the levels of the lowest new listings in the seasonal slow part of during that time. So much different marketplace. But this is where we are. And hopefully the conflict gets to end soon when we get back to data and jobs weeks coming up. So here we are again, another jobs weeks with rising inflation and war and everything just to throw another hot pepper into the soup. Okay. I like this metaphor, hot pepper into the soup. Okay. What do you expect for jobs week? And And at this point, what matters with Jobs Week? Because it feels like it's kind of a, unless something really big happens, unless something breaks, it's not going to make any difference. So the Federal Reserve has written two little mini dissertations basically telling us that if we create 30,000 or more jobs, we're fine. A month? A month. You know, they'll be completely fine with that. Jobless claims are still historically low. Job openings are getting softer internally, but they're not breaking. The labor data was never breaking. Like we've always stressed this from 2022 even. We said the Federal Reserve are jobless claims people. They need to see jobless claims start to head toward 300 before they start to do anything. That's never occurred. So now they're writing articles about, hey, listen, job growth at even at 30,000 is fine. So unless you get higher unemployment and lower jobs data than that, Federal Reserve is just not going to care at this point because they're going to say the labor force growth is too slow and we just don't have enough people for work. I don't agree with that premise because you get these big job number prints and they go, where do these people come from? So they're there, but they made it very clear that unless you get jobless claims rising, rising unemployment or some negative numbers, even a 30,000-month job is perfectly fine. We talked about this last year, that we have to be careful at one point, the Federal Reserve is basically making that policy, and they kind of did with some of the work they've written recently. Man, so much going on. Thank you for joining us today. To break it all down, of course, I'll be talking to you again soon. Appreciate you so much. And You're in Utah today? Is that where you are? I am in Deer Valley, Utah at the Grand Hyatt. This is lovely. This is just a lovely, beautiful resort, a beautiful area. So I am spoiled. I'm about to talk in about two, three hours. So just a beautiful place. Man, this country has some beautiful scenery. And this is one of the things I know. This is one of the benefits of Nurturers going to places that I've never gone to and enjoyed it. Well, good luck on your talk. We'll talk again soon. Thanks, Logan. Thanks for listening to Housing Wire Daily. If you haven't already, we'd love for you to take a minute to rate the show and leave a comment. And make sure to tune in tomorrow for more news and insight. Real still matters when it comes to AI. Real use cases, real outcomes, real stories from people who have implemented successfully. The HousingWire AI Summit, August 11th in Dallas, cuts through the noise. You'll hear real use cases married to real customers, walk out with your AI roadmap, and what to do in the next 90 days. Speakers are rolling out soon. Register now at housingwireaisummit.com. Housing Wire AI Summit, August 11th in Dallas.
