Will higher rates spur a mortgage rate lockdown?

Name: Will higher rates spur a mortgage rate lockdown?
Uploaded: 2026-10-08T08:00:53+00:00
Duration: 24 min 11 s
Channel: HousingWire

00:10Welcome, everyone. Today, I'm joined by lead analyst Logan Motoshami to talk about a key

00:15level for the 10-year yield and whether these higher rates mean a mortgage rate lockdown.

00:20Before we dive in, here are the top five trending articles on HousingWire.com.

00:24The first is, will mortgage rates nearing 8% force lenders to make cuts or close their doors?

00:31Followed by upstate New York bucking national housing slowdown.

00:34Then we have CRMLS went on offense against Compass. Will other MLSs follow?

00:40And UWM moves to dual score model auto selects best result.

00:45Finally, we have states outpace Capitol Hill on factory built housing policy gains.

00:50Logan, welcome to the podcast on this crazy bond day.

00:55Yeah, I mean, it's October. And we kind of said, you know, as soon as Trump said there was going

01:04to be no deal until after the midterm, I'm like, oh, just like throw the paper.

01:09Okay, that's the bond market isn't going to do anything until that's over with.

01:13And part of the issue is that, you know, we're saying that, you know, we want a better deal because

01:22oil is flowing and Iran is saying oil prices are elevated and we can, you know, we could cause more

01:28damage.

01:29Whatever it is, there's now an inclination that, you know, you might not even get a deal after the midterms

01:36because both parties are far apart.

01:38In any case, it's pretty wild, you know, for housing wire intelligence, I do these bond market updates, you know,

01:48talking about everything.

01:49And, you know, this 535 level is very key.

01:53I think I was like 26 years old last time we were here on the 10-year yield.

01:58But if you look out, like, for a very, very long time, we haven't been above that level.

02:05And we've tested that level, I think, three or four times right now.

02:08And early in the morning, the 10-year yield went up.

02:10You know, there's drama with France, bond market, conflict headlines.

02:15And then it just shot right back.

02:16So we're getting into this area where this becomes another fight that we've been talking about for the past 10

02:25days.

02:25But if the 10-year yield closes above 5.35% and you get more bond market selling, well, you

02:33got legs to run on here.

02:37And we always have these key levels that we've talked about throughout the years and in the last three or

02:42four years.

02:43There's a Gandalf line.

02:44There's a Holder line.

02:45But this is one of these, you know, gladiators, hold the line, stay with me.

02:50And it's very interesting to see this fight at this level right now.

02:57So, you know, we've talked before over the last couple months.

03:00Is it the Fed that's driving this?

03:03Is it the Iran conflict right now?

03:05What's driving that 5.35%?

03:07I mean, to me, it's everything.

03:09I think a lot of people just miss the economic growth story of 2026.

03:16The labor market got better because the labor market got better.

03:20The Fed got hawkish.

03:21And then because the Fed got hawkish before the conflict, then all of a sudden the conflict happened.

03:27So there was this question asked today about, you know, how much of this is AI?

03:31You know, is it corporate bond issuance?

03:33I'm not a big corporate bond issuance guy.

03:34But I said, listen, economic growth is picking up.

03:36The city surprise index is breaking out to a multi-year high.

03:42So the 10-year yield is going up.

03:43The Fed has stayed hawkish early and has risen this up.

03:48So there's a lot of things that are working into play here.

03:51But, you know, last week was the first week where I actually saw the Fed try to blink and just

03:58kind of try to talk the market down for more aggressive rate hikes.

04:03Even Lori Logan, who's one of the hawks, kind of didn't really go anything above that level.

04:08So it's a fascinating thing to see this wash.

04:12But this is all, a lot of this is still positive because the economic data is good.

04:18And I think that's just the disconnect between a lot of people.

04:21A lot of people say, well, the 10-year yield is up.

04:23Rates are going to go.

04:23Most of these people are anti-central bank people anyway.

04:26Like rates are up.

04:28Everything has to crash.

04:29You want to talk about a group of people that America just crushed.

04:34I mean, just absolutely hulk smashed these people down to hell.

04:39And hell didn't even want them.

04:40And they're underneath that below where hell is.

04:43So if you didn't have good economic growth data, if the unemployment rate was rising, then it would be a

04:50different story.

04:50But you have everything kind of in play.

04:52But right now, it's a good key fight.

04:55And I'm really interested to see because you have a lot of Fed people speaking this week at a bond

05:00auction.

05:00Next week, we're going to have CPI inflation.

05:02But as long as this economic growth story still stays and the unemployment rate still slows and jobless claims are

05:09low, we can stay up here.

05:11Now, when the conflict ends, when it ends, it officially ends, and everybody believes it, and oil starts to flow,

05:17and everybody starts to make money again, then you can see a little bit of a drawdown.

05:21But that economic story is still here.

05:24And I guarantee you, when the conflict is over and oil prices come down, the Fed hawks are going to

05:30go, well, that just means there's more money to spend.

05:34So there's a lot going on.

05:36But traditionally speaking, for the United States of America, when bond yields go up, it's because the economic data got

05:42better.

05:43And you had that, and you had the Fed getting hawkish as well, and they front-loaded this, and they've

05:49been riding it up.

05:50And then you got the MOU deal break off.

05:52And then you have, we're not going to do a deal with the midterms.

05:54So we have a lot.

05:56This is a lot is happening, kind of like what happened in 2023.

06:02Mortgage rates were actually down to 6%.

06:04A lot of people thought we were going into a recession.

06:06Here in 2026, a lot of people thought AI was going to take all the jobs, private credit, and the

06:11U.S. economy just rolled over these people.

06:13I mean, just like a tank rolling over you.

06:16None of that was here, and here we are fighting this key level on the 10-year yield.

06:21It would be fascinating next week when this inflation data comes out.

06:26I think it's one of the ironic, frustrating, challenging, whatever parts of being in housing is when the overall economy

06:35is doing good.

06:36You're going to, you know, rates are going to rise, and that's not good for us, right?

06:40So folks in housing are suffering while, you know, maybe other folks aren't.

06:45Yeah, but it's also, this is what you want to see an economy growing.

06:50You want to see the unemployment rate low.

06:51You want to see, but, you know, this is a little bit more than just growth, of course.

06:57Again, the conflict was like, it's like throwing Chucky in the middle of a party.

07:04You're not Chucky.

07:05Like Chucky, just like, you know, you just have a party out there, and all of a sudden, Chucky's there,

07:09and he's got his knives out, and all, it's just chaos, right?

07:12You know, and you just know, it's a little doll running around there trying to cut people.

07:15So the conflict was just an agent of chaos, and that's just complicated things.

07:22Well, and I think, you know, so the Fed, you know, some of the Fed obviously was like,

07:27hey, let's talk down the bond market.

07:29But when Besant today, the Secretary, Treasury Secretary, went out there and was talking,

07:34it actually just made it worse as far as like, because then it gives Iran something to come back on

07:38and talk about oil rates, which then had an effect on the bond market.

07:42The trolling by Iran to Besant, because I don't know if people knew this, Besant talked,

07:48he talked about, you know, Iran, the head of the Iran's oil sector basically quit.

07:55And Besant's like, what is he doing? They're not getting any oil then.

07:58And then like the Iranians do this little hill chart and said, oh my God, look,

08:03the 10-year yield's up, diesel's up, everything.

08:05Oh, look, consumer confidence is down and, you know, housing affordability is down.

08:10So the trolling back and forth by country, I mean, it's just a way that, I mean, think about 60

08:17years ago,

08:19if somebody told you on social media there'd be countries fighting each other with memes and videos and stuff like

08:28this.

08:28But this is the world we live in.

08:30I mean, this is just, that's how messages get thrown out there.

08:36The Russians were really good at this in the last decade with their disinformation campaigns.

08:40But it is what it is.

08:43You just got to go out there and tell people the truth as much as it can be in this

08:48chaotic environment.

08:49But I find it very fascinating that we're really trying to hold the line here.

08:55But we said that in 2023 that, you know, when the 10-year-old is like, I think, 435 and

09:01everything.

09:01I still remember I went on CNBC that morning and said, when Powell's going to come out,

09:06he's going to be very, very hawkish in the bond yield, isn't going to, and he went, he went very

09:10hawkish in the 10-year yield.

09:11Broke that key level and shot up straight to 5%.

09:16But mortgage spreads were really bad then.

09:18Mortgage spreads are much better now.

09:21And I think today you would have had 870, 8.7% rates if you had the 2023 spread.

09:28So, yeah, it's just, it's October.

09:31So, I don't think they're going to get a deal anytime soon before the midterms, like some people think.

09:37But just get used to this and we will cross that hell bridge, whatever it is, after the midterms and

09:44see what happens then.

09:45But so far, it's been kind of what we thought it would be.

09:50Well, let's talk about rates a little bit because at this level, you know, we've seen some people say, hey,

09:57at this level, is there a mortgage rate lockdown?

09:59I know you are not a fan of the mortgage rate lockdown.

10:03And you, you know, we can talk about mortgage rates in the 6%, but, you know, over 7.5%, is

10:09that a lockdown stage?

10:12So, one of the reasons why I don't, I don't like the mortgage rate lockdown premise, and people have to

10:19realize, I was fighting this in the last decade.

10:21I think the first or second article I wrote for Housing Wire, I was fighting the mortgage rate lockdown, you

10:26know.

10:29I think it's lazy.

10:30I think it's one of these things where, it's like, it's like how I tell people, how I show people,

10:35because we did these charts again, because we get the data updated every quarter.

10:39And we have, of course, we have more people with 6% plus mortgages than 3%.

10:44But we're also getting to the point where we can see the inflection point of having more people with 6

10:50% plus mortgages than 3% to 4%.

10:52Now, not all of these people are sellers that took higher rates.

10:57Of course, there are first-time homebuyers into the mix.

11:01But if I thought we had an authentic mortgage rate locked out, our new listings data would have tanked a

11:08lot more than it has.

11:10Because you, as an American citizen, are not entitled to buy a house because you got a divorce, or you

11:16got a kid, or you're moving a job.

11:18You have to qualify for that house if you're going to get a mortgage.

11:21So when you list your house, and our new listings data, I'm using that, those sellers, most of them are

11:28buyers.

11:28So they go out there and they buy another house, and they're giving up their low rate.

11:32I think the comprehension of why would anybody give up their 2.75 or 3.5 or 4% rate

11:40to buy, it's a total payment cost, right?

11:43So the people that are buying homes, again, we are near 5 million total home sales.

11:48The peak in the last decade, 2010 to 2019, was around 6 million.

11:52And there was 3.25% to 5% rates for 10 years.

11:54And housing was much more affordable.

11:58But those sellers are still buying.

12:00Now, so far, the new listings data has held up pretty well.

12:04What we saw in the second half of 2022 was, you know, we saw an authentic break on the new

12:11listings data where people just go, I am not, you know, rates were just 3%.

12:14It's 7%.

12:16There's where you got to see in home sales crash.

12:19But so far, 2023, 2024, 2025, and 2026, the new listings data has been slowly picking up for the last

12:26few years.

12:27It's not quite back to normal, but it's getting closer there.

12:31So I can make a case that you have a big downside in home sales if we had a mortgage

12:37rate lockdown.

12:37Just think about all those people who are listing their homes to sell them.

12:41Imagine if they just said, oh, I'm locked out.

12:45So it's not in the data yet.

12:47I just think there's more variables at play.

12:49Housing tenure has doubled.

12:51That's really big.

12:51It's a total PITI cost now with qualified mortgage and Dodd-Frank and everything.

12:56So naturally, some people that want to move or, you know, just literally can't.

13:01But so far this year, in the last, I would say, four to five weeks, I haven't seen anything in

13:06the new listings data that would make me think of the second half of 2022 or the first few weeks

13:14of 2023.

13:16Is there anything, when you look at, I've seen some headlines about arm loans and the arm loans that will

13:23reset in 2027.

13:25Any thoughts about those?

13:30No, I mean, listen, they are resetting much higher.

13:34I'm just thinking about all those big, crazy people that talked about the 2019 arms and that it was going

13:40to bring a surge of, there is so much trash on the internet.

13:44You know why I think people like me is because I go after these people.

13:48I do think that's true.

13:49And I just literally, I want to light people up with their name and face so their family members get

13:54to see them.

13:55Because then you got to own it, right?

13:57No nameless, faceless men.

13:59You got to own that stuff.

14:00And the arm loans now are not the arm loans that were in the run-up, you know, or whatever

14:071996 to 2002 was, but also the 2002 to 2005 arms, which got even more exotic and toxic.

14:15It's not an issue.

14:17And we keep on sitting here thinking people are so poor that their total PITI costs, which they have to

14:24qualify for anyway, is going to bring a surge of inventory.

14:27And we have countless of videos that every single one of these people are going to go to their graves

14:32with talking about arm loans since I can remember like the last seven years.

14:36And even if you had a hypothesis of a surge, you need to see it in the new listings data.

14:41And it's just not here.

14:42It's, homies, y'all, it is October 2026.

14:46And y'all got to give the arm.

14:48We've had so many arm recasts or, you know, buy down recasts.

14:51And there's nothing in any of the data out here, so no, you qualify with that recast payment.

14:58It's like all these people say, credit card debt, credit card.

15:00All these people, Americans are poor.

15:01They're going to rush to sell.

15:02I mean, one of the doomers we fought in 2026 at a 20% home price.

15:07He's like, Americans are poor.

15:08They're credit card debt, credit card.

15:09And you have your own country roll over you with a tank.

15:14You know, that's what the U.S. consumer is going.

15:16In your world, in your mind, you think everyone's poor.

15:20But if it was a stress situation, you would see it in the new listings data.

15:24And this is why we always, whenever we show the new listings data on the weekend tracker,

15:28we show what it looked like back during when there was actual stress.

15:33And this is why we read books instead of burning them.

15:36And you show that data and go, if this is happening, you got something.

15:42How many arms recasted in the last few years?

15:44Nothing's happened.

15:45There's nothing out there.

15:46So it's just the structure of the debt is different.

15:50And again, still in 2026, the new listings data is healthier, but it didn't even get

15:56back to normal levels that we would see.

15:59So no, I'm not a, it doesn't even, it doesn't even cross my mind.

16:02The only thing that crosses my mind is who am I going to light up who keeps on talking

16:06about, you know, and the stupid thing about the 2019 arms is that mortgage rates went down

16:10to like three and a quarter percent, you know, you know, anybody could have refinanced

16:13out of them if they were, if they felt like it was an issue.

16:16But we just live in a crazy world where just people like to just make stuff up to get

16:21attention out here.

16:23Oh, that's, that's definitely true.

16:25Okay.

16:25So last week's tracker, you talked about, you know, seven, eight or 9% rates.

16:29Is there anything going on right now in the bond market that pushes you a little bit towards

16:348% more than it did when you wrote that?

16:36So clearly the 8% call having the 10 year yield get to 540, that wasn't high enough with

16:43the bond market.

16:44I'm trying to teach people how the spreads yields and works with, with certain rate levels

16:49and, you know, getting to 8% rates needs mortgage spreads to deteriorate.

16:55So I think we got to 536.

16:57I think the pricing today is 7.63%.

17:00I mean, it's close to eight, but it's not 8%.

17:02And look, look what all has to happen for just to get to 7.63%.

17:07The economy has to be on fire.

17:09You know, the fed has to be hawkish.

17:10Unemployment rates are low.

17:11Jobless claims are low.

17:13Growth in investment has to come up.

17:15We have a conflict around the Middle East.

17:16The French bond market is acting up.

17:18All these things are happening.

17:20We're here.

17:20So this is why I said it's hard to get to 8%.

17:23And we, I mean, and this conflict is now going into the midterms, which, you know, not a

17:29lot of people thought when it originally started that this would, you know, be anything, but

17:33we're going into the midterms here.

17:35So if you want to go for the 8% camp, you really need that 10 year yield to break

17:40that

17:40540 level.

17:42And we're putting up a big fight right about here.

17:44And also you're starting to get the fed to trying to push back on this, but again, good

17:52economic growth, low jobless claims in economy, uh, uh, uh, expanding, uh, those are the things

17:59that need to even keep going.

18:00And the conflict has to stay worse, uh, to get to 8%.

18:03It's really difficult to get to 9%.

18:05Uh, even if I had the 2023 mortgage spreads, which was three 11 on how we track it.

18:12And the last time we were above 3% was 1986.

18:15So we didn't even have that above, uh, after COVID or the great financial crisis.

18:20So, uh, it's difficult.

18:21It gets more difficult to get up there, but hopefully now when we write those articles

18:25and we give you the 10 year yield and spread levels out there, we're creating a pathway to

18:30get there.

18:30And it just wasn't the 10 year yield isn't high enough to get there because the spreads

18:35haven't gotten worse.

18:36Well, and I will, I will say again to our listeners, uh, Logan updates the, um, on housing

18:41wire.com intelligence.

18:43He has his market insights throughout the day.

18:46Yeah.

18:46Our last couple of days, crazy stuff happening.

18:49Yeah.

18:50It's, I mean, this is chaos.

18:52I mean, for someone like me, it's, it's fun, but, um, but you know, it it's, it's, you

18:57don't want chaos in the mortgage and real estate industry because the inflection points of rates

19:02spiking or even rates going down super fast, low, uh, uh, creates a chaotic, especially

19:08with early payoff risks and, you know, people trying to lock, you know, their, oh, I rates

19:12were just half a percent lower now, you know, from a few weeks ago.

19:16So boring is a good thing that the most conducive backdrop we had for housing was January and

19:20February of 2026, where nothing was happening.

19:24You know, we just were between six to six and a quarter.

19:26And that was it.

19:27That was like the slice of heaven.

19:29Uh, and then all hell broke loose, but, but going back to the, to the mortgage rate

19:35lockdown, you know, when Mike Simonson brought that up, that people will act differently.

19:38I just don't think it matters in the big scale things, whether somebody has 6% rates or three

19:43and a half percent rates, because, because people are living in their homes longer and

19:46longer.

19:47There's not this quick, fast variable for people who just got into something new, uh, uh, that

19:54they would have to need some life event to change for them to matter.

19:57It's like, well, guess what?

19:59Mortgage rates are seven and a half, whatever it is at six.

20:03I just bought my house two years ago.

20:05So people live in their homes longer and longer.

20:06That's why I think like one of the bigger historical things about housing economics is

20:10housing tenure doubling, uh, in some case tripling, uh, uh, is a really big deal with housing

20:16demand.

20:17It doesn't get hardly any play out there, but, um, I mean, I've lived in my home for 21 years,

20:22you know, you know, and in normal sense, I probably already moved, uh, twice or, you

20:28know, I probably sold my house to bring supply and buy, but, uh, because of that, I don't

20:32think there's a change.

20:33A lot of people say, well, you know, there's all these people with 6% rates or 7% or

20:37they're

20:37poor.

20:38And that's like, no, they're not guys.

20:39If you're buying a house in this environment, you're not poor.

20:43And this whole thing that poor people buy homes, y'all don't, I have a real like questionable

20:48thing on what you've defined as poor, you know, oh, this guy bought a $900,000, one bedroom

20:55condo in a Newport beach.

20:56He's poor.

20:57Like he's house.

20:58I was just like, it's just, we have so much trash on the internet and it's all around housing

21:04for like 25 years.

21:05And you just got, you just got goofy ass men just running their mouths off and it just,

21:09none of it makes sense.

21:11And it's, it's October, it's October, 2026.

21:14We've been doing this from, since 2012, right?

21:17There are inflection points to economic cycles that we always like to work on, but this is

21:22not it.

21:23When residential construction workers lose their jobs and manufacturing and industrial production

21:27falls and real wages are falling with retail sales and then investment, then you could

21:31go into the recession.

21:32But it's like 16 years now.

21:34If it wasn't even for COVID, we'd have the longest.

21:36And these people just paradise doom pouring themselves to history.

21:41But, but back to the original subject of mortgage rate lockdown.

21:44I just think that it doesn't change the behavior because of 10 year.

21:48Now, of course, hypothetically, let's say you do have a recession and rates, you know,

21:53get to five and a quarter or something like that.

21:55Affordability gets better in that environment.

21:57So you get some turnover, but it's not like this titanic change because home sales have

22:04been very, very low for a very long time.

22:06And what we've looked in the history of, of existing home sales, when you have that low

22:10base buildup, whenever you have that big rate move lower, you get that, you know, surge

22:16in demand.

22:17But that's a lot of that is just, you know, built in for sales being low.

22:20And then you just gradually move on with sales of affordability stays by.

22:25And that's, that's kind of where we're at.

22:27So a mortgage rate lockdown to me is the worst case scenario.

22:31Cause you can have existing home sales fall a lot, like you 1.7 to 2.3 million existing

22:37home sales.

22:38If we had a lockdown and then you don't have that supply, it is the worst of both worlds

22:43out there because there's nothing beneficial out there to anybody, less supply, less demand

22:48and not a functioning marketplace.

22:51That's why, that's why I always fight it because I don't think people realize like how

22:55bad it would be if you had one.

22:57And part of the problem is I don't see the federal reserve as being like housing people.

23:03So it's just like, you know, they, they, they, they talk about it in a very awkward way, but

23:06Beth hammock and them says, Oh, we can't do anything about housing because even if mortgage

23:11rates are lower, nobody's going to give up their homes.

23:13That is such an unsophisticated take on housing economics.

23:16And part of that is everyone feeds into this mortgage rate lockdown thing.

23:20And just, it's not sophisticated enough for, for me to, to, to endorse.

23:25Logan, I appreciate you walking us through that and we will talk again soon.

23:30All right, fun.

23:31And it's, we still have a few more weeks left in October.

23:34So, so giddy up.

23:35And did you like my, uh, thriller dancing, you know?

23:39Oh yeah.

23:39No, I actually thought that was a really good one.

23:41Your AI is unsurpassed, unsurpassed.

23:44You've trained it very well.

23:45It knows you very well.

23:47And it just cracks me up all the time, except when you have me in it.

23:50And then I always say no, because I'm like, no.

23:52Uh, uh, the finger came out.

23:54There you go.

23:54Yes, it did.

23:56When it comes to AI, me and AI.

23:58Okay, Logan, we will talk again soon.

24:00Thanks.

Will higher rates spur a mortgage rate lockdown?

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