Are 9% mortgage rates possible?

Name: Are 9% mortgage rates possible?
Uploaded: 2026-09-29T08:00:18+00:00
Duration: 20 min 2 s
Channel: HousingWire

00:10Welcome, everyone. I'm joined today by lead analyst Logan Motoshami to talk about whether

00:15we could actually see 9% mortgage rates. We'll also talk about mortgage spreads. Before we dive

00:20in, here are the top five trending articles on HousingWire.com. First, we have mortgage rates

00:26have gone wild, so what's next for housing? Followed by where builder discounts are biggest

00:30and who is still buying. Then we have CFPB examiner sues Bureau over race discrimination claims

00:37and UWM names Vandad Fartaj as first chief investment officer. Finally, we have MLSs are

00:44changing, so is their relationship with realtor associations. Okay, we are ready to go. Wow,

00:50so much happened when I was off. Logan, welcome back to the podcast. Welcome back, Sarah Wheeler.

00:57Looks like we had a wonderful wedding for your daughter. And yeah, it's been crazy. It was

01:07another crazy weekend. It was another crazy morning. You and I were going to headline something else,

01:12but just before I come on, a surge of people are like sending me messages, 9% rates, 9%

01:19rates,

01:20and I was like, what happened? And then I sit there and Selma Help, who's a very dear friend

01:26of mine, and she's the chief economist for Crotality. Her and I will actually be speaking

01:32at the CAR event next week. She went on CNBC today and the headline is, I haven't even seen the

01:40video

01:40or anything, but it said, is 9% mortgage rates a possibility? Which was funny because I'm sitting

01:45here and this is Monday morning. So the 10-year yield got up to 527 and I'm 13 basis points

01:53away

01:53from my 540 possible 8% mortgage rate and rates were 750. And I was like, it's not going to

01:59work

01:59because the mortgage spreads are getting better. They can't get better. They got to get worse.

02:03And I'm sitting there and then all of a sudden a good surge of 9% rates. I was like,

02:06whoa,

02:07what just happened? So of course, the last podcast talks about why mortgage spreads are so

02:12important. But the question is, can 9% mortgage rates happen?

02:18This is a very, it's a huge question. And I mean, you know, rising mortgage rates,

02:23not good for our industry. Everybody, you got a surge of questions because that's what everyone

02:26wants to know. So from your perspective, are spreads keeping it lower than that?

02:32So to, to every, every equation needs an ending and you have to put all the variables.

02:39So I thought, remember it was like four or five weeks ago, we did a podcast talk about, you know,

02:45hey, mortgage rates can get worse, right? It can't not, don't, people stop talking about 6% rates.

02:51Things can get worse from here because why? The variables in this equation are in play and

02:57they're getting worse. So I think what, what's, what's going on, especially in the last, I would say,

03:0316 days, as soon as president Trump said, there's no deal until after the midterms,

03:08the bond market's like, go, you know, whatever, you know? So because of that, you know, the 10-year

03:16yield is now becoming more volatile than normal. And I know Beth Hammock, Cleveland Fed president,

03:25Neil Kashkari, the smirk of Austin Goolsbee and Lori Logan might say, well, the bond market is

03:31orderly or the leg of the standard. It represents strong economic growth and the labor data is stable

03:38and we have $40 trillion of debt. By the way, everyone, if I ever give you a reason why bond

03:45yields should go up because of $40 trillion of debt, I want you all to not follow me ever again

03:50because I went to cuckoo land. If I was an analyst and I ever use federal debt as a, as

03:55a model,

03:55I would have been wrong for 40 years, like so, like so many people for many years, but that's,

04:00that's a different story. Getting to 9% rates really is what we talked about at the last podcast.

04:08You really need mortgage spreads to get better. Now, if you look at the history of the 10-year

04:12yield and nominal growth, right? Nominal growth is really picking up this quarter. When you adjusted

04:17to inflation, of course it's real, but on the nominal side, that's, that's, that's an indicator.

04:22If you look at what Kevin Walsh had said, Kevin Walsh said two really important things. Now,

04:27I might be hashtag anyone but Walsh, but that Fed presser was very good because he was very clear.

04:32A, number one, we are taking the dose of accommodation out. So oddly enough, you know,

04:39when I, when I try to explain this and we'll do this at the mortgage banking summit,

04:43Jerome Powell kept on saying we are modestly restrictive. You know, he kept on doing that term

04:49so we can anchor the, the Fed funds rate down toward three. Kevin Walsh took that away. I don't

04:55know if Trump understands what that did, you know, but you know, when you say we are, it's not mildly

05:03restrictive. We are accommodative. That's a, that's a titanic change of, of policy. But you really need

05:12the economy to grow five, six, 7% nominal growth quarter after quarter after quarter. You need the

05:21conflict to stay here for a very long time. You need the Fed to stay hawkish and the economic data,

05:27there cannot be any softness in consumption, investment or anything. And the 10 year yield

05:33has to go much higher with worse spreads. If you really wanted to make an equation with variables to

05:399% mortgage rates, that's how you get there. So if you're really super bullish on the U S economy

05:47that's what you would use. I did not hear. So I did not hear the talk. I don't think 9

05:52% is their

05:53base case. I think that was like, you know, worst case scenario, but to me, it's all those things

05:58working together. And so far it looks like my 8% mortgage rate theory. It doesn't look like it's

06:05going to work out. Cause we're, we were 13 basis points away, but the mortgage spreads got better.

06:10I said, you need about 23 basis points of mortgage spreads to get worse. You can't have it get better.

06:14And this is why it's hard to even get there, but you, you need this con you need all these

06:19negative

06:20things to come into play and they have to stay. They can't get better right for this to occur.

06:25That's why it's difficult. That's why it's difficult for 8% mortgage. I mean, if this was 2025,

06:302024, 2023, we are over 8%, we're over 850, we're over 860, you know, already, but because the spreads

06:38have gotten so much better and they didn't get worse today. And that's, that's the reason why

06:43we're 750 and not 8%. So it's, it's, you need the spreads to get worse, to get to 8%

06:49and have the

06:5010 year yield at 540. Okay. So to your point, what's happening. Okay. So president Trump came out

06:56and, and made an announcement and the bond market reacted. So tell us what's happening there. And if

07:01you think that's going to be material. So this is a very interesting thing that I've noticed.

07:09The Iranians were always frustrated with how the markets reacted to Trump's headlines.

07:16So to counter it, they would always fight back on these Trump headlines because Trump would say

07:21something to try to get oil prices lower and the 10 year yield lower. So today, when you said Trump's

07:27going to say something at X time, he did. And he said, he's opened to the possibility of giving

07:34sanction relief. Okay. So the 10 year yield fell like five, six basis points within seconds,

07:40but then it kind of perked just right back up. Nothing too material as of this. I don't know what,

07:45by the time we're ending here, it might change, but you know, I don't think these, these headlines

07:51work anymore or haven't worked for a while because once, once we started attacking the

07:57Iranians during market hours, that was a change. Like the market said, okay, y'all want to go this

08:02route. Okay. Where did you see the volatility on the 10 year yield oil trade? But once Trump said,

08:07there's no deal until after the midterms. And now the talk, well, maybe we might start the war

08:12or a conflict even more after the bond market is like, guys, I don't see a deal here. So the

08:18tactic

08:19might've worked a few months ago, but until you get some kind of authentic closure, the bond market

08:25oil markets are now we're getting a lot more oil out there than what people know. You know, the Iranians

08:32are getting some of their oil out there as well in this whole process. So it's not like

08:41the oil transportation is, is extremely low before, but we are still at elevated levels with the

08:48potential of the conflict getting worse. So I think it's, it might've worked two, two, three months

08:55ago, but they have very mild effects at this stage. So from your perspective, until we get an actual

09:02peace deal, which from all, from all that we can see is going to happen after midterms, this is where

09:08we are. This is where we are. Again, there's just, there's a lot of talk that the Iranians feel like

09:14they might lose their leverage after this. And, but also what if the Democrats sweep the house and the

09:21Senate, you know, that negates president Trump's ability. So it, this is just chaos, Sarah. It is just

09:31absolute madman chaos into this equation. And we're going into October, which means we're going to do a lot

09:37of Halloween AIs. And I just, I, I, to, to, to me, I always like to study how the markets

09:46react to the

09:47news and things changed after the first MOU deal broke. And then Trump said those things about,

09:54we won't get a deal. So the bond market has, the volatility has escalated and it's something,

09:59right? The federal reserve can't really, what, what, what is Kevin Warsh and Beth Hammock and these

10:03people are supposed to do. People say, why don't they come out and talk the bond market down for

10:07what? This is a conflict. The conflict can get worse, right? And diesel prices are up, oil prices

10:14are up. So I, it's a very, very complicated situation, but we've always seen anything positive

10:20on the conflict yields fall. The first MOU deal oil went all the way down to 68. The 10-year

10:27yield got

10:27down to 4.46, 4.48. We are, we are far from those levels, man. So there's consequences to actions,

10:39right? And this is, this is one of them. And because we have two-year political cycles,

10:44Sarah, how many times have you and I talked about this over the last few years? It is difficult to

10:48do titanic changes in the U.S. economy if it creates inflation because you have two-year political

10:55cycles. And because you have two-year political cycles, you know, Trump's approval rating is very

11:00low. The Republicans' approval rating is very low. And now we're going into the midterms. So actions,

11:06consequences, this is what we're dealing with. And we're going into the month of October this week.

11:11Pretty, pretty crazy. Well, let's, as we've talked about the mortgage rates, let's talk about what that

11:16did to housing data in your tracker over the weekend for last week. And what are we seeing as far

11:22as

11:22demand inventory? So I thought it was really important for us to talk about how the year-over-year

11:30comps are going to look much different now. We had easier comps to show year-over-year inventory growth

11:40and inventory growth is still low single digits, even with easier comps and even with mortgage rates

11:49near seven and a half. And I think some people are confused. And I understand they're thinking about

11:55the escalation of inventory, like they saw in 2022, like they saw in the first six months of 2025,

12:06something to that nature. And the closer we are to normal, the more it's going to take to really get

12:15bigger moves. And this is just kind of like a denominator factor on this. And also remember,

12:21housing moves a little bit slow. You don't, you're not going to get that kind of impact

12:25like we saw in 2022. We always thought, we love our slope of the curve on all of our data

12:30lines. We

12:31think it's very prolific. But what happened in 2022 is inventory was working from 240,000,

12:38the lowest levels in history. Mortgage rates were at 3%, then it went to 7%.

12:42And we are working our way back to normal. And we are sitting here in the first week of this

12:49week

12:49will be October of 2026. And we're not back to normal, even with all that, even with the fourth

12:57calendar year of the lowest home sales ever. But if you give it a little bit more time with mortgage

13:05rates above 7%, inventory should grow. The new listings data took a dive, but it looked like a

13:13dive from a very high previous week. So you want to keep an eye on that. What you don't want

13:17to see

13:17is the new listings data start to head lower on a year over year basis continuously. Because that's

13:24again, 70 to 80% of home sellers or buyers. And then you need a healthy level of new listings

13:31data

13:31growth. The last two years were good, you know, compared to the previous year. So on the inventory

13:35side, I think some people were confused, but denominator factor and, you know, most of the

13:40year mortgage rates were under 6.75. So harder to get much inventory growth in that kind of environment.

13:47Okay. So, you know, on the inventory side, it's actually a good thing if we could get some more

13:52inventory because that, you know, that helps affordability. It brings down home prices.

13:56But we will say not the 20% crash that I think you had people over the weekend be very

14:03specifically

14:04like, that's what they're saying. They're betting you money or something is crazy. We need that to

14:09come down a little bit. Nobody, there is no path to a 20% crash. You know, it's interesting. I

14:15really

14:15try to help someone out. If you're actually making a 20% nominal home price crash call within a calendar

14:20year, then you need the first month to be down by 20%. Because every month that goes by, if you're

14:26not down by 20% already, you need the second, third, fourth, fifth, you know, so this is why if

14:33you look

14:33at the history of nominal home prices going 1942 to 2026, it's very rare to see nominal declines. But

14:38even housing 2008 was 12%, but you already had the foreclosures and declines happening in 2007.

14:47The supply and demand equilibrium was breaking in 2005. It took years to set that up. It wasn't

14:54here. So I had to kind of explain it mathematically. You don't have the odds on your sides. Now for

14:58myself, of course, my forecast has been wrong. Case-Shiller index is going to come out this week.

15:04The year-over-year comps are easy to show a little bit more growth. So if you see year-over

15:09-year

15:09growth, don't be surprised on that. But higher rates-

15:13For your home prices?

15:15For the Case-Shiller home price index that comes out. But what higher rates does is cools down

15:20price growth. That's the history of it. I have a better chance of my forecast being right.

15:25I would not have been right at all if mortgage rates stayed below 6.64%. I don't know if I

15:31have

15:31enough time in the year to get my negative 0.62%. But again, another year of home prices going nowhere.

15:37So a really good calculation on this, because I talked about this, how it's so much of a healthier

15:42housing market. Let's say 2021. 2021 home prices went up 19%. I only had, like I always said,

15:50years 2020 to 2024, for anybody who doesn't know my past, is that the housing market will have the

15:55weakest recovery. But years 2020 to 2024, it's like a once-in-a-lifetime shot where demographics

15:59are really good for housing. The only problem is if home prices, for some reason, go above 23%,

16:0523.5% in the five years. We lost that in the second year. So for me to offset 2019,

16:14or excuse me,

16:15to 2021's 19%, I need about three years of no home price growth nominally or real home prices being

16:22declined. Last year was one. This year is going to be another. Next year, and then we could offset that

16:27dynamic. So it's healthier for the future of growth, of sales. But what we don't want to have

16:35is 2023. 2023 had 6% to 8% mortgage rates, but home prices were still up 6% that

16:41year. No advantage

16:42out there. So the demand getting hit a little bit for the week is the first noticeable hit that I've

16:50seen all year, not to do with anything of holidays or anything like that. But what that does still is

16:56keep prices in check. And this is why I always say it's a healthier housing market now than what it

17:01was back then, because you get no advantage with prices at that level. 10% in 2020, 19% in

17:092021,

17:106% in 2023. Those don't do you any good for future sales growth.

17:16Okay. So we've talked about mortgage rates. We've talked about inventory, home prices. What else stood

17:20out to you about the tracker last week?

17:22I just, you know, really highlighting how important the spreads are and how, you know, the last podcast

17:31went into this for us to even get below 7% again, the spreads have to stay at these levels,

17:37right? You

17:37can get the conflict over and oil flowing and everything, but if the spreads get worse, like

17:41they're at 75 basis points worth, you would have a hard time getting back to even seven and a quarter.

17:47So as long as it just stays at these levels, it'll be a positive. Weekly demand got hit

17:55for the first time that I would, that I would say this year, even though it doesn't look like a

18:00big

18:00number, it is a big enough number on the weekly side. Inventory did grow. We're just, we're almost

18:06near the seasonality of inventory. So it'll be a good, interesting setup on what happens the next

18:11three months going into 2027. We'll keep a track of everything, but a lot of good charts in there on

18:17the spreads and the 10 year yield inventory to give you an idea. I'm really focusing on the new

18:22listings data for the rest of the year. You don't want that normal, new listings always declines at

18:28this period of times, but you want it to stay at kind of on the same pace all year. You

18:32don't want

18:32to see new listings data do what it did in the second half of 2022, just noticeably go lower on

18:38a year over year basis. Great wrap up there. I love that. And for me, the takeaway, if I'm out

18:44there

18:44is you do not see 9% mortgage rates anytime soon, it seemed you made the case for what we

18:51could do

18:51to get to 8% and we're still not at that, seeing those things. You have to be super bullish

18:57on the

18:57US economy and you have to have the spreads get worse. Okay. So if you're super bullish on the US

19:03economy and the spreads get worse, there's your best case for 9% rates. The 10 year yield has to

19:08get up

19:09to 6% and you need worse spreads. It's really hard to even get to 8% now. This is

19:14why 9% is

19:16we really shouldn't be having that discussion. 8% with all the drama coming on, but at some point

19:21this conflict ends, right? And at that point we could reassess everything on where the 10 year yield

19:27wants to be a little bit more comfortable and get that oil to 10 year yield trade out of the

19:31equation.

19:32Logan, thank you so much for holding down the fort last week when I was out,

19:36listened to those podcasts. They were great. I'm glad to be back and, and back in the mix and we

19:42will talk again soon. Thank you. And as Rebecca could, could attest, I behaved on all the times

19:47I was by myself. So you did great. You did great. So appreciate it.

Are 9% mortgage rates possible?

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