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

01:142027. The oil prices were up, 10 year yield was up 10 year yield got about 5%, which means when

01:21it

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

01:27up in

01:282018. Whenever the 10 year yield got above 3%, all the doomers went over. It's over America's,

01:33you know, and to toughen men up in America, we thought that every time it goes below, you see,

01:38you don't have to be so afraid of living in America anymore. Like back in the 1800s, like people

01:43used to die of pneumonia, people died very young. I mean, there was all these, it was very hard life

01:48back then, but now you're living in your single family home. You have 2G internet access, you have

01:54air conditioning. Come on, man. Toughen up a little bit. Okay. But if you're in the mortgage

01:59industry, these rates are not good. They're not good, but the country is still alive and ticking.

02:05And we're still going to have near 5 million total. This is what I always tell people. We're still going

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

02:17three

02:17and a quarter, 5% rates, rates for hold was around 6 million. So we're going to make this. We're

02:25not

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

02:31aged men, podcast stock traders. I'm making fun of. Very interesting morning, Sarah. Very,

02:37very interesting morning. The 10 year yield got to 5%. When we, I'm so glad we did that podcast a

02:43few weeks ago talking 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.

03:05I think this morning we were at 717, which means like we've done all the time in the last three

03:12and a half years. When rates get below 6.4 and head towards six, demand picks up. When rate gets

03:17above 6.64 and heads above seven, 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 fell,

03:31like went down five or six basis points. So what happened? Was it best in, was it everything?

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

03:40the energy facilities are getting hit and diesel prices are up. Ukraine said, okay, we'll do it.

03:45I don't know if Russia will do it. And Trump says, I'm open up to a deal with Iran, right?

03:50Iran 30

03:51seconds later said, Oh my God, we're not, we're not doing this. Whatever, whatever it is,

03:55it brought the 10 year old lower. Last time I checked was like 494, 495. In any case,

04:00we're up here still. So we know what needs to happen to get things better. The question is,

04:06can we execute on any of these things? And that's what we should really focus on for the next three

04:11and a half months going into 2027. If you're looking out for mortgage rate direction, because

04:17we know what the issue is here. And we just got to be able to find a way to make

04:23it better.

04:25It's crazy how those headlines can just, I mean, it goes up, it goes down just based on,

04:31on, on what comes out on a Monday morning. Well, following a pretty wild Sunday night,

04:37you know, we knew that this morning was going to be interesting. Anything surprise you?

04:42No, I mean the, 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

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

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

05:11you guys have to remember this, like Iran, Russia, and China are enemies. They can't really like fight

05:18us in war, but they're probably all working together to make the midterms as bad for president

05:25Trump as possible. And I mean, China is such a big player in the oil markets now that, you know,

05:30we've talked about this. I mean, they've been holding back on purchasing. There's, I mean, my,

05:35my fear again, with that oil chart breaking out is that they're all going to work together

05:40and do something right before the midterms to make this very problematic. And then we,

05:45and then in their ways, they see that as victory as Trump will lose more seats in Congress. Cause we

05:51have two year political cycles. They don't. And that's always the problem when doing something

05:56like this is that, you know, they get to play different rules. There's political consequences.

06:02We're trying to do this. That is inflationary. No politician really survives inflation bursts

06:07over the last 2000 years and always appolishes and thinks they can get away with it.

06:12Trump at least try to like take over the federal reserve and bring oil prices out, but the whole

06:17Trinity trade backfired on him this year. So tough. It's harder. I mean, you know, like you're JD Vance

06:24right now. What are you going to talk, talk about, you know, running for president? Oh, we're going to

06:27do more tariffs. We want the dollar to go down, you know, all this. So whatever this is, the next

06:32three and a half months is just going to be very interesting. Okay. Well, let's, let's talk about the

06:37Fed meeting this week, right? What a backdrop. And we have seen over the weekend and then this

06:42morning, Trump doing another full court press on the Fed specifically Warsh and talking about

06:47how, you know, rates need to come down and, you know, people are like, woo, this is going to,

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

06:56to

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.

07:08Um, and I just think he says that I, I think the whole takeover of the Fed, you know, backfire,

07:15just remember it was always going to be Kevin Warsh, right? Kevin Warsh was handpicked a long

07:20time ago for this. So he's running into trouble because Kevin doesn't want to talk a lot. And then

07:25he was trying to do this task force and all these things. And he talked about it where we need

07:30lower

07:30rates for mortgage industry or, you know, or housing, but you know, the, the policy isn't

07:35restrictive for the economy, but for house, the problem is this conflict has created a variable

07:43chaos that it's very difficult when the Fed chairman doesn't talk, but Beth Havoc, homegirls out

07:51there, we need to, Beth Havoc's like every, every six hours, she's itching to write something on

07:55LinkedIn about, you know, how we need to raise rates, you know, raise rates, raise rates. Or he's

07:58like, I'm going to do a whole little thing about raising rates. Lori Logan, Neil Kashkari. And a

08:03few other Fed people are really starting to sound more hawkish. And the Fed chairman is.

08:10So a difficult time for him to do this in this environment. Again, if it was like Mitt Romney

08:17or Paul Ryan, like Kevin Warsh would be a perfect, like Fed chair for him. But in this, you know,

08:25this is what we have to deal with. The market's already priced at a rate hike.

08:28That's not, that's not going to be a shock. It would be more of a shock if they don't hike

08:33at this point. So, but again, that's who cares. We know what the market is going off of.

08:40Mortgage rates went from 5.99 to 7.17 without a rate hike. We've had many times where mortgage

08:45rates go from, you know, seven and a half, seven and a quarter down to near 6% with no

08:49rate cuts.

08:50The bond market does its own thing. And the bond market just doesn't like this oil trade.

08:55But if you can get something done, you know, and it's so much, it's less about the Fed now. It's

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

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

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

09:182.0 worse

09:19and then let the chips play because you can't do anything about AI. Even all this news over the

09:24weekend about AI and we're going to slow things down and the money's already there and it's going

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

09:34Whatever people think about it, the unemployment rate is still low. Jobless claims are still low.

09:38Nominal growth is still good. Wage growth is slowing down. The Fed probably likes that one more than

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

09:47there's something that can be done by a human being, you know? Uh, and, uh, uh, the, the Fed

09:53meeting, we'll, we'll see how hawkish they sound. I don't, I don't know. We, we're still trying to

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

10:02what a time for him. You know, he thought it was just going to coast kind of in here, but,

10:07you know.

10:08Do you think that, um, he will, because we, we know we expect the, the Fed generally to vote

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, don't 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 good. Every time you say the smirk of Austin Goolsbee,

11:29if people watch, I laugh. I don't know why. Every time you say that, it makes me laugh.

11:32Listen, for when people say this, go, go type in Austin Goolsbee and go to his image on Google.

11:38You'll know exactly what I'm talking about. Homie just smirks all the time. It doesn't matter what

11:42he's even saying. So I've said the smirk of Austin Goolsbee, you know, and people do it. They go,

11:47oh 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,

11:56like it's not running the show. As long as the oil 10-year yield trade is so prominent,

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

12:09last time the 10-year yield was here in 2023, we had all the rate hikes in. We had no

12:14rate cuts

12:15being discussed. The Fed funds rate was much higher. But again, with nominal growth where it's at,

12:22with the unemployment rate at four point, with jobless claims low, deficit spending,

12:27CapEx spending out here. Again, Skynet is winning. We're building for Skynet.

12:32Like we're not doing what we did in the matrix where we have a bunch of babies and put them

12:36in

12:36tubes and humans are the energy source. We're literally building. Like 5,000 years from now,

12:43some 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 like,

12:51what happened? We can't shoot the sky and it gets dark and energy is low. We build out the system

12:58out there. So all that is still in play. So there's things you can control and not control.

13:03It will be interesting to see how forward looking goes. But to me, as we talked about months ago,

13:09the Fed hawks won. They were winning months ago. They got the easing buys out, two-year yields up,

13:14three-months pricing in, 10-year yields up. The Fed is getting restrictive policy as much as they can

13:20control. Like the things they can do. They can't cut spending or anything out here. And then you got

13:26Scott Bessett, I am the house. And I always think of Bane. Just think of Bane right behind him. And

13:31Bessett wants to punch everyone out, but he can't really punch Bane out. Though I think Scott's bigger

13:36than Bane, the actor. In any case, here we are. This is what we have to deal with. As soon

13:43as it's

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

13:48going. It's going to be interesting. It is going to be interesting. Okay. So keep an eye on the oil

13:55chart right now is really key to the 10-year yield. Are we at your level? Are we just a

14:00little bit above

14:01your level of what you thought? I did not. When I said worst case scenario and that things could get

14:07worse at this conflicts, the 10-year yield was 5%. That was it for me. And I said, 713 to

14:13718 is the

14:15worst. Oh my God, the spread. Sarah Wheeler, when we did the spreads data, that was the widest spread

14:22gap in the last few years or since we've incorporated it into the tracker. Mortgage rates, just to give you

14:29guys an example today where the spreads are in 2023. Mortgage rates would have been 8.36%, the worst

14:36levels in 2023 today. With the 10-year yield at this level and then you're like, okay. And the spread

14:42gap, yeah. Because the spreads actually came down again, how we track spreads. We would have been at

14:47basically 8% in 2024. Last year, even last year, if I took the worst levels of the spreads last

14:54year,

14:54we'd be closer to 8% today. So when people visually get to see that, they get to understand why

15:01I've

15:01talked about this. But I wasn't planning on the spreads being this wide and giving you that much

15:07protection because the 10-year yield had 5%. It was more or less that we don't need the 10-year

15:12yield

15:12to really get below 4% to have rates near 6%. Not that we're going to prevent that happening. So

15:19I think

15:20the value of the spreads on the upside gets to be seen today just as much as it was on

15:25the downside

15:26out here. And a really good example was that mortgage rates got like 6.12% in 2024, but the

15:3110-year yield

15:32was at 3.62%. So I mean, we are at 5.5% with the spreads this year, if that

15:40was the case.

15:42But man, talk about me, homies. It could be a lot worse, but hug a mortgage spread. But right now,

15:48I mean, that's as all as I can do is I thought if we hit the 5% 10-year

15:52where the spreads are,

15:537.13, 7.18, we're 7.17 today. I don't know if we get a repricing lower because mortgage rate

15:59or the 10-year yield has fallen. But it gets very interesting if it gets worse at this point.

16:05You could clearly see Trump is hearing it on both sides because of diesel prices and everything.

16:10Truckers are mad out there. They're saying we can't make any money with diesel up here.

16:15And I am just worried that he thinks maybe Putin and Trump are these people. They're all working

16:21together. Maybe they're friends. No. I'm worried that they have something in plan for the midterms

16:26and it gets worse, right? That oil chart doesn't look good to me after a few weeks ago. And I'm

16:32like,

16:33there's a midterm coming up and all these people, they're working together. That's why they're

16:37bricks. So we as a country can handle that. Our economy can handle it better than anyone else.

16:43But politically speaking, and I think that's part of where Trump was told probably that the whole

16:51thing is just to make it worse for the midterms. Interesting. And of course, we have the precedent

16:56that we've seen with Iran back all the way to Jimmy Carter, right? They decided to extract as much pain

17:04as they could with the hostages waiting until Reagan got in. And so they know how to do this.

17:09They've made it plain. They're going to do that if they can.

17:12Two-year political cycles here, they don't have them anywhere else. And at least countries like

17:18that. So that's the advantage they have. And it's a disadvantage if a politician wants to really get

17:24aggressive with something in a two-year political cycle out there where he'll lose some seats or he'll

17:30lose the White House. But the one good thing going on in the future is that try to convince Americans

17:37on

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

17:43this. You know, so I think this is, I think if you're J.D. Vance and you did all these

17:48videos,

17:48we need a lower dollar. We did, you know, again, the Trinity, the whole Trinity thing we talked about

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

17:57lower. You could offset whatever comes in, but the whole thing backfired, you know, in the midterms

18:03year. So 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, we started

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

18:21headwinds 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 was

18:35about 1.6%. So not much velocity on inventory, but the week before the holidays last year was

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

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

18:53fell full. This always happens. I do believe that part of the pending home sales is not the weekend

18:59related because every time rates above 6.64 and then head above seven, we see that slowdown.

19:05Really good example, 2023, when mortgage rates went from 7.27 all the way down to 5.99, we had

19:1312

19:13weeks. Remember the November 9th, 2022 thing, all that, you know, the forward looking data got better.

19:18And if, as soon as we get down to 4 million, home sales should stop crashing. We had one of

19:24the

19:24biggest month to month sales prints in U S history. It was like back then it was 500,000. I

19:28think they

19:28revised it to about 430, but then rates went up to 7%. That was it. You know, that was a

19:33peak of sales.

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

19:40a

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

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

19:52because, you know, we're really kind of at the same rate ranges last year. Last year,

19:58we were seven and a quarter to 612, you know, kind of, uh, uh, uh, last year, this year we're

20:045.99 to 717. So it's, it's kind of the same exact range we did, uh, last year, even though

20:11the 10

20:11year yield was so much, uh, higher. Uh, so then we just work off of that and then rates have

20:16to get

20:16that. But the thing is that we know where we have to go to get there. And the benefits of

20:23the last two

20:23years is that home price growth is adjusting to inflation is negative. Wages are outpassing. So

20:30housing affordability got a little bit better on its own without rates. Uh, uh, in 2023, that wasn't

20:35the case. Uh, even though mortgage rates went from six to 8% inventory was still too low. Home prices

20:40were up 6% that year, but this year we're, we're up one to 2%. Maybe my forecast gets correct

20:46down

20:47negative 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, just a

21:01healthier spot because active inventory is up. This is one of the things when I go on TV a lot,

21:06I tell

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

21:10anymore. Now, of course, housing starts and permits aren't going to go anywhere or anything like that,

21:15but you don't have to worry about home prices crashing 30 or 40%, but you don't have to worry

21:20about home prices growing above, uh, wage, wage growth right now. And I think that's, that's the

21:25healthier aspect of this foundation year for the last 24 months where it was different than before.

21:30Of course, during COVID housing was severely unhealthy, so I don't have to bring that up

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

21:40take off

21:40anymore 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

22:28stock traders to sell, to be homeless. So you don't get this velocity of this day. There's no surge of

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

22:39All these fraudulent 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 times people got axes and ready, you know, they're,

24:31oh, I don't know why I have a finger. No, I appreciate you so much. And we will talk again

24:36soon. Thanks, Logan. Pleasure.

Fed week preview and mortgage rates

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