Logan Mohtashami on Navigating the Housing Market, Economic Slowdown, and Government Policies
Mar 20, 2025
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Logan Mohtashami, a lead analyst at Housing Wire and recognized housing expert, delves into the current mortgage rates and housing market dynamics. He discusses the implications of economic slowdowns on these rates and explores the construction industry's challenges. Logan dispels myths surrounding tariffs and their impact on home prices, and compares today’s housing cycle to the late 70s and early 80s. He also highlights rising concerns about insurance and property taxes, emphasizing collaboration needed to support vulnerable homeowners.
Current mortgage rates are influenced by economic slowdowns and government policies aiming to stimulate the housing market through lower costs.
The residential construction sector faces challenges due to elevated mortgage rates and uncertain market conditions, impacting the supply of new homes.
Deep dives
Current Mortgage Rates and Economic Impact
Mortgage rates are currently fluctuating between 5.75% and 7.25%, with the 10-year yield decreasing in recent months, indicating a potential for further drops in mortgage rates. Analysts suggest that a slowing economy tends to drive treasury yields down, which consequently lowers mortgage rates. The government seems to be steering towards reducing the labor supply and demand to help lower rates, with an emphasis on stimulating the housing market through a decrease in mortgage costs. As economic conditions evolve, there are concerns that ongoing trade tensions and job loss might challenge this downward trend in rates.
Construction Labor Market Challenges
The residential construction sector appears to be nearing a recession, sparking concerns over the impact of elevated mortgage rates on construction jobs. Although there has been slight relief in rates, builders are hesitant to increase construction permits due to uncertainties surrounding future costs and tariffs that may elevate prices. The housing market relies heavily on the ability to maintain a skilled labor force, and if necessary adjustments are not made, the supply of new homes may not meet demand. The competition among builders has also intensified due to geographic concentration in inventory growth, especially in states like Texas and Florida.
Concerns over Tariffs and Home Prices
Tariffs have emerged as a significant concern, potentially leading to increased costs for builders and affecting the overall housing supply. Builders are likely to face challenges in passing these costs onto consumers, as the market is already heavily price-sensitive and many are still recovering from higher costs during previous years. As new home sales struggle relative to existing home sales, builders are pressured to keep prices low while managing operational costs. The ongoing uncertainty around tariffs may lead to market hesitance, impacting investment and resulting in stagnant growth until clearer policies are established.
Historical Comparisons of Housing Cycles
Today's housing market dynamics are being compared to the late 1970s and early 1980s, particularly due to rising home prices amid economic fluctuations. In historical contexts, home values maintained resilience even when sales volumes dipped significantly, similar to recent market conditions. Analysts note that if mortgage rates decrease further, it could rejuvenate home sales, resembling patterns observed in previous decades. With a record low supply of existing homes and climbing wages, the environment suggests that a significant price crash is unlikely, even amidst current fears of inventory increases.
Join Logan Mohtashami, a renowned housing expert, as he breaks down the current state of mortgage rates, the housing market, and how government policies are shaping economic conditions. In this episode, Logan discusses the relationship between economic slowdowns and mortgage rates, the challenges facing the construction industry, and the dynamics of today’s labor market, including the impacts of deportation. He also clears up common misconceptions around tariffs and their effect on home prices, explains the differences between existing and new home sales, and highlights the rising concerns around insurance and property taxes. Logan also compares today’s housing cycle to past decades, particularly the late 70s and early 80s, offering valuable insights into the unique factors influencing the current market. Don’t miss this in-depth discussion!
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