HousingWire Daily
Logan Mohtashami: How low do mortgage rates need to go for builders?
Jan 20, 2025
Logan Mohtashami, a lead analyst known for his deep insights into housing dynamics, shares compelling thoughts on the current state of the housing market. He discusses the recent decline in building permits amid rising housing starts and the critical impact of mortgage rates on builder confidence. The conversation dives into how political policies influence the construction labor force and the potential consequences for future home sales. Mohtashami also highlights the significance of mortgage applications and trends that could shape the market in 2024.
27:29
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Quick takeaways
- Mortgage rates near 6% are crucial for stabilizing buyer demand and allowing builders to manage existing inventory effectively.
- Despite rising housing starts, builders' decreased confidence amidst volatile mortgage rates poses challenges for future construction and market growth.
Deep dives
Current Trends in Housing Starts and Permits
Recent reports highlight a significant increase in housing starts, while permits remain at recessionary levels due to builders working through existing backlog. This disparity suggests that, although new home sales data is holding steady and builders are not facing high cancellation rates, the overall market environment is becoming more challenging. Factors such as rising mortgage rates near 6% create a more balanced scenario for single-family homes, making the construction of homes more viable. However, builders' confidence has decreased, which may lead to lower housing starts in 2024 compared to previous years.
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