Has housing demand already changed with lower rates?

Name: Has housing demand already changed with lower rates?
Uploaded: 2026-11-09T19:35:55+00:00
Duration: 19 min 13 s
Channel: HousingWire

00:12Welcome, everyone. I'm joined today by lead analyst Logan Motoshami to talk about whether

00:16housing demand has changed already with lower rates. Before we dive in, here are the top five

00:22trending articles on HousingWire.com. First is the tracker. Mortgage rates fell and demand

00:27stabilized as inventory dipped, followed by why didn't the strong jobs report send mortgage rates

00:33skyrocketing? Then we have NAR membership proves more resilient than expected, topping 1.46 million,

00:39and the housing laws that could derail a sale and why realtors need to pay attention. Finally,

00:45we have ICE. Borrowers reach record tappable equity as cash out refis drive runoff. Okay,

00:51we're ready to go. Logan, welcome back to the podcast. It is wonderful to be here, Sarah.

00:56Your hotel rooms are always so pristine and perfect, you know, and mine is our absolute

01:03chaos. And, you know, it's good that you've got, you're showing your clean hotel room. You're in

01:10Sedona, Arizona. I'm in beautiful Sedona. Yes. And why aren't you showing yours? What's in the

01:16background? There's no need to. I'm just, it's like that, like that pastor says, I'm the whirlwind,

01:24man. I'm just chaos traveling around the country. So it doesn't need to be seen. But so speaking of

01:32chaos, you know, I always have a thing, you know, you know, I've got to deal with the Russians,

01:37the Chinese, the Iranians, disinformation campaigns, like I do with the anti-central bank.

01:41And of course, since we're talking about AI, you know, NVIDIA CEO, you know, China honeypot,

01:49you know, that was a thing over the weekend. And there's so much focus on AI, you know, now. And

01:57this morning, oil prices were down early in the morning. The 10-year yield was down a few basis

02:05points. And CoreWeave stock price was down just a smidge pre-market. And now the Nasdaq's rallying,

02:12CoreWeave stock price is up. The 10-year yield is up a few basis points.

02:17So, you know, we talked about the AI, jobs, 10-year yield, you know, how that's trading. And

02:22here's another example of that. Today, we had two hawkish Fed presidents, Goolsby and Harkin.

02:29Of course, jobs data was fine. Jobs Week was fine itself. And I know, you know, when you look at

02:36165,000

02:38jobs and people go, how's that possible? We were told that zero jobs is fine. You know,

02:42some of that business hiring was getting ready for the holidays, but there were other sectors that

02:47were growing as well. And so far, the 10-year yield is still kind of in that head and shoulders

02:55pattern

02:55on the lower end. The question is, you know, does the Fed want to, okay, okay, we're not going to

03:03do

03:03any more aggressive rate hikes. And they're still staying very hawkish as we're trying to figure out

03:11how to stop this conflict. There's headlines that J.D. Vance has an $8 billion deal. Whatever it is,

03:18they still haven't given the A-OK that, you know, we're almost done with this rate hike cycle. So,

03:24we're just hovering right at this key level. But the volatility is becoming less and less,

03:30and that should be better for mortgage spreads going out in time.

03:36So, let me ask you this. So, we have been watching that CoreWeave stock, right? Because

03:40we saw some correlation there. That's going up. But if you have NVIDIA going down, which I assume

03:46it still is, maybe it hasn't, it might be changing as we speak. But in general, are the AI stocks

03:51rebounding? And that's why we're seeing things pick up a little bit?

03:55NASDAQ is up. So, CoreWeave was the baby that got hit, you know? So, I'm always following that

04:05because that took a real big downside. So, I'm focusing actually, oddly enough, more on that

04:11stock than NVIDIA. NVIDIA, that's other issues. But the NASDAQ is up, stocks are up, bond yields are up.

04:20And for now, just for now, if they could just get the conflict over with, you get a deal with

04:28Canada. You don't enact any more tariffs, you know, in any big fashion or anything. You just,

04:35you leave that, let that go. And then you're just, you know, focusing on the data centers, which

04:43over the next two years, there's going to be moratoriums. There's still things that pipeline.

04:47So, you still have the AI story intact, but less growth. And the reason I say that is because

04:52Austin Goolsbee came out and said, AI data centers are clear overheating. And when you look at the

04:58spending, you go into data centers, it's off the charts, literally, not even hard to say.

05:07So, I don't think the Fed wants to give the A-OK that, yeah, listen, we'll just take the insurance

05:14rate cuts back and that's it. But it's still a positive day considering that the labor market

05:21was fine, the stocks are rebounding, and the 10-year yield is still kind of on the bottom of that

05:29head and shoulders pattern. So, I would take that Monday as a victory. And with less volatility over

05:36the next, you know, maybe 68 weeks, mortgage spread starts to come back down. And all you need

05:42is mortgage spreads just to come back down to where it was a few weeks ago and you're sub-7

05:46% rates

05:47without any help from the 10-year yield in that. But that usually takes duration and time to work

05:53itself up. Man, that would be good news. Well, we're already starting to see, right, with the tracker,

05:58we already see demand stabilizing as rates came down. Tell us what your takeaway was with this

06:05weekend's tracker. So, it was a noticeable decline week to week on inventory, which, you know, at this

06:12time of the year, you're always waiting for that, you know, seasonal decline to starts. But, you know,

06:18we had Halloween and always when I think about big national holidays that everyone likes to participate

06:25in, you know, July the 4th and stuff like that, you know, you have less people playing. With less

06:32people playing, you know, new listings data typically goes down. And, you know, if you're looking to buy a

06:38house, you're in that process anyway. But, you know, some people just might not wait. They'll just wait the

06:44following weekend to do it if you're around a holiday. But the inventory data declining as much as it did,

06:51I

06:51would put a bunch of variables into that. Number one, the downtrend that we've seen in our weekly sales

06:58data and we're going to get the existing home sales report this week. It's not going to be pretty, but

07:03in a sense, it's somewhat old compared to what we were dealing with back then. This is how fast the

07:10market could change. Our weekly pending home sales had a clear breakdown when rates went above 7% and

07:15went all the way up to 760, right? You saw a clear slowdown. Weekly demand hit, inventory rising

07:22higher than normal. We were having some negative year over year inventory print. So we're showing

07:27some growth now. But because it's now three weeks of no more declines and just stabilized and rates are

07:37at a multi-week low and now the seasonality factor, I think that explains the big decline in inventory.

07:46And, you know, next weekend, you know, Halloween and all that stuff gets readjusted. So it wouldn't

07:52shock me if inventory picked up just a little bit. And then the seasonal decline should really take

07:59hold. But you've got a glimpse that even with rates above 7%, you can get a stabilization from a

08:06downtrend. That's it. To me, there's always a seasonal factor. There's holidays and then there's weather.

08:13But I'm still sticking to the premise that I've only seen growth when mortgage rates get below 6.64

08:20and head to 6. And this is going to be year four of that in the data line. Now, you're

08:24going to get

08:24some seasonal kick push into this data. But it is encouraging to see that, you know, the worst case

08:33scenario, this was the worst case scenario that I was thinking for housing. The 10-year yield closes

08:38above 5.35%. You get further bond selling and bond traders moving herds are like, OK, this technical

08:44level broke and all hell is going to break loose. There's no end to the conflict. It gets worse.

08:50The trade war 2.0 goes in a worse fashion, right? The Republicans hold the House and the Senate and

08:57they stay firm with their trade war and the conflict as being a policy. And then the bond yields just

09:04explode higher because, you know, there's going to be no focus on slowing down AI data centers. And in

09:12that environment, the 10-year yield can escalate higher. None of that's here. The exact opposite

09:19happened. So all those variables, we say that there are things in play that can make things a little bit

09:25better. And we're seeing that now. So there's a lot more that needs to be done. But considering that,

09:31you know, people were worried about 8% plus mortgage rates, some people were talking about 9%. The fact

09:36that we have a shot of getting sub 7% before Thanksgiving, and we see it in the tracker data

09:44stabilizing thing, that's a good sign, especially going into 2027. Because hopefully by then,

09:52the trade war and that stuff is over with. That's not been popular. Red states, blue states, anything,

09:58that's not been a policy that's been liked. The conflict finds some resolution. The AI moratoriums

10:05will come into play a little bit later on. There'll be some new regulations. You know, I think that

10:09story still stands. You know, the big boys are still making money. There's a lot of spending that's

10:13going on. But you get a little bit of a slowdown. And since the Federal Reserve has made it so

10:18much of

10:18their talking points the last six to eight weeks, that's a big deal. And then we just take it from

10:24there, right? We're gonna have another year where wages outpace home price growth, affordability

10:28gets a little bit better, a good backdrop for 2027. But again, I still stick to my principle,

10:36I've seen growth only when this happens in the last three years, and now 11 months. So it's just

10:44stabilization from a fast downturn. So let's dig into the mortgage spreads. That's one of the highlights

10:49for me and for many people, the tracker, because it really helps explain a lot of the things that are

10:54going on. And you did things a little bit differently this this week. So you have been saying if we

11:00had

11:00the worst spreads of 23, 24, 25 versus today, and tell us what you did on this one.

11:06So this one, now that we are over 40 basis points from the low, I think the low on how

11:12we track and just

11:13remember mortgage spreads are going to be a different number for anyone. It depends on who you quote on

11:18mortgage rates on the day and how you model that out. So we have our version and how we do

11:24it as

11:24we show it all the way back to 1971. So we keep constant with it. The lowest spreads this year

11:30was

11:301.82. So now that we're over 40 basis points above, I said, well, let's take the best levels of

11:38the

11:38spreads in 2026. Where are mortgage rates today? 6.72. Wow. No help. No help from the 10 year yield

11:496.72. That is in the ballpark of the forecast range for 2026. You get any help on the 10

12:00year yield,

12:02you get below 6.64. And that's the beauty of mortgage spreads being near multi-year lows

12:08compared to, you know, where we talk about the only other time I refer is 2023 and we're above 8

12:15%

12:15today. So that's a material change. Even with spreads getting worse, we would have never been

12:23under seven and a quarter if we're not down to multi-year lows. But now we could say, hey, listen,

12:28we just get back to the lows of this year. 6.72. You get any help from the 10 year

12:33yield,

12:33you get under six. And just remember, I just fundamentally believe, I don't believe you

12:37could have mortgage rates under 5.75% with Fed policy neutral being 3%. Just remember a neutral

12:43policy was the Federal Reserve gets to a level where they don't think they're restrictive or

12:48accommodative. They're just neutral. Kevin Walsh doesn't even believe in that concept. But I think

12:55showing that side of the spreads now gives everyone, hey, listen, you just get back down

12:59there, less volatility over time, spreads get a little bit better. There you go. But spreads

13:05typically when you have a big increase in mortgage rates in the bond yields, and you have a big sharp

13:09reversal, they do get worse because their job is to compress volatility. So what's happening with

13:15spreads right now is perfectly normal to what its job is. So I just wanted to show that side of

13:21the

13:21equation that, hey, listen, you're already on under 7% with any help from the spreads coming now. And

13:27then we kind of take it from there one day at a time. That's really incredible. And you always go

13:32back to 2023 because that's when they, that was the Silicon Valley banking crisis, right? That shot

13:39mortgage spreads so, so big. So the last time how we track mortgage spreads, the last time mortgage

13:46spreads were above 3% was 1986. And there was a lot of drama happening in 1986. The Fed was

13:52hiking

13:52rates at that time. But mortgage spreads were improving in 2023 and noticeably improving early

14:03on. And then all of a sudden the Silicon Valley banking crisis happened. And then the Fed was still

14:09hiking during the Silicon Valley banking crisis. So those two together are like, okay, no, the spreads

14:14got worse. So, uh, for the first time since 1986, not during COVID or even the great financial

14:19recession, mortgage spreads got above 3%. So that was not a good thing whatsoever. We would not have

14:27had 8% mortgage rates if that didn't occur. Uh, but now even with the 10 year yield getting as

14:33high

14:33as 5.35%, we still was a 40 basis points away from 8% rate. So hug a mortgage spread,

14:41take a selfie

14:42with it. Make sure to give it a nice, nice turkey leg for Thanksgiving, yams, mashed potatoes, the best

14:50stuffings in the world. You give it the best Christmas presents you could possibly give because

14:54it could have been a lot worse. And, but we're, we're, we're at the stage of the cycle.

14:59My gosh, we are so thankful for that. Thanks for that. Explaining that because I do think

15:03everywhere you go that I hear you talk and you're like, Hey, who here knows a lot about

15:07mortgage spreads. It's getting better because a lot of people listen to us and follow you, but, um,

15:12still it's, it's a pretty confusing topic. And I think that it's really interesting now that it has

15:17started ticking back up, but to your point, it's, it's not getting out of control. And if it could

15:22come back down a little bit, boy, huge for us. Huge for us. And, and just on a side note,

15:27I'm in South

15:28Carolina for the first time in my life and, uh, we're at the Atlantic Bay summit. And I just had,

15:33uh,

15:33uh, uh, a lunch with, uh, uh, all the lovely people out there and they are huge podcast fans.

15:39You know, they want to create shirts with all the sayings that we have, but they, they tell me,

15:44all right, you know, Sarah's wrong a lot. She, she tries to punish you. And, uh, and, uh, you know,

15:50just, she just, uh, the, the people in Atlantic Bay just want to let you know, you know, you gotta

15:53be a

15:54little bit, uh, uh, nicer to the chart daddy. Well, that's interesting because I'm at the executive

15:59women's summit for Alice in Sedona and the people that I've talked to who listened to the podcast

16:05are like, you're doing a great job. Keep Logan in line. So I think it's just who, who decides to

16:10talk to us. It's always keeping me in line. I told you that you're, you're, you, you're doing the Lord's

16:16work to try to, you know, keep, keep this Tasmanian devil in line. But, uh, um, I am, but let's

16:23be

16:23honest. Our podcast producer, Rebecca Black is really doing the Lord's work because we're always in

16:28different places. We're always in crazy hotel rooms that don't have, you know, even if they're

16:32super nice hotels, they don't have great wifi. Like she's really, she's really the unsung hero

16:37here. Yes. Yes. It's a team effort. Like I always like to remind her team, all of us together. And

16:43I

16:43was thinking of trying to go to new, I was going to go to New York to accept our award,

16:47you know,

16:48cause I didn't have to speak to it. I was like, Oh, let me see if I could go to

16:50New York. Think about

16:51me in New York and the, and the, uh, accepting a ceremony. Oh God, get me on stage and let

16:57me give an

16:57acceptance speech. It's your kind of, it's your kind of deal. That's a bad idea. I better, I better

17:04not, better not leave South Carolina. You better stay there. Um, so generally speaking, uh, when you

17:10looked at, when you were talking about, okay, what to look for, for this week, we've already had some

17:14of those things happen. So you're like keeping an eye on AI stocks already happened. And then you're

17:18like, keep an eye on those fed speeches, which unfortunately came in hawkish. They were both, uh,

17:23Austin Goulds, we have believed is going to be a voting member next, next, uh, year, but you know,

17:27I, I, I still want to believe that if you get the conflict over and the trade war over these

17:33two

17:33things, they harped on, if they are off the grids, these are things that they had talked about.

17:38Then you could take two variables out. Uh, you can't do much with AI and you don't want to see

17:43the labor market breaking, but I think that would be a big things. I think, I don't think they want

17:47to

17:47commit to that yet. Remember if the fed really wanted lower yields, they can get it, you know,

17:51they could, they could change policy, but they came out, uh, uh, pretty hawkish. And then, uh,

17:56uh, we'll, we'll take it one day at a time, but yeah, we got inflation week this week, CPI. And

18:00then Friday the 13th, you have PPI inflation, but already you could see a turn just on the mood of

18:06everything. And that, you know, going out in the future, even if some of these inflation reports

18:11are hot, you know, if we could get some of these other variables fixed, the bond market might not put

18:16enough weight onto these things, thinking about going out in the future and how inflation will look

18:21without tariffs, without war. And with a fed that might be a little bit more dovish. It's good.

18:27Thanksgiving, you know, you know, it could have been a lot worse, Wheeler, but I'm going to take

18:32small victories when I can. No, that would be a great Thanksgiving. We will all take that. So

18:37Logan, thank you. Um, as always for keeping us up to date, riding the tracker, jumping on here and,

18:43uh, and for your insights on how's your intelligence. Pleasure everyone. And I'm sorry for the Raider fans.

18:48Battle of the Bay is still San Francisco. And I'm just, I cannot believe I'm, I'm UCLA is ranked

18:53number four in the nation. And I'm just like, I'm having a great year. I'm loving, I'm loving

18:58football more than anything. I'm glad for you. All right. We'll talk soon.

Has housing demand already changed with lower rates?

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