Logan Mohtashami on the civil war brewing at the Fed
Apr 18, 2025
auto_awesome
Logan Mohtashami, a distinguished lead analyst renowned for his housing market insights, joins the conversation. They dive deep into Jerome Powell's leadership at the Federal Reserve amid rising tensions and differing views within the Fed. Mohtashami reveals the surprising resilience of the housing market, countering narratives of panic, as mortgage applications rise despite high interest rates. The discussion also highlights historical comparisons, showcasing how current homebuyer behavior mirrors past trends, defying expectations of a downturn.
Jerome Powell's leadership at the Fed faces internal conflict as some officials advocate for rate cuts amidst labor market strain.
Despite high mortgage rates, housing data shows resilience with increasing purchase applications, indicating actual buyer interest remains strong.
Deep dives
Jerome Powell's Leadership Tensions
There is significant tension surrounding Jerome Powell's leadership at the Federal Reserve, particularly with growing calls from some Fed presidents for rate cuts as labor market indicators show signs of strain. Notably, Fed presidents like Waller and Bowman are advocating for a shift in policy to address rising jobless claims and an economic slowdown, while Powell appears more cautious, suggesting that the current restrictive stance should remain until labor conditions deteriorate further. This split within the Fed may lead to a 'civil war' of sorts, especially as public criticism from political figures, such as Trump, escalates against Powell if unemployment rises. Ultimately, the future of Powell's tenure may hinge on labor market performance, which will influence how aggressive the Fed can be in adjusting interest rates in response to economic pressures.
Housing Market Resilience Amidst Fear
Despite prevailing fears about the economy and elevated mortgage rates, housing data indicates surprising resilience and a continued interest in homebuying. Even with rates above 7%, purchase application data shows year-over-year growth, suggesting that consumer behavior contradicts claims of widespread panic. The podcast explains that this trend counters the narrative that people are withdrawing from the market due to fear; instead, mortgage applications are maintaining a positive trajectory, highlighting a disconnect between headlines and actual homeowner actions. The underlying factors seem to suggest that American homebuyers are making decisions based on their personal circumstances, not solely influenced by external economic factors.
Builder Confidence and Housing Supply Stagnation
Builder confidence remains low, with new home construction and permits stagnating despite stable new home sales figures. The podcast suggests that the anticipated construction boom has not materialized, as the housing permits and starts data indicate that growth is minimal and consistent with levels seen during the early stages of the COVID-19 pandemic. Although some marginal improvements in builder confidence were observed, it was not enough to reflect a genuine uptick in activity, particularly influenced by high mortgage rates. This continues to reflect a unique cycle in the housing market where economic indicators are showing expansion, yet new housing developments are not keeping pace with demand.
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about Jerome Powell’s future as head of the Federal Reserve. The two also discuss housing data, which remains positive despite uncertain economic factors.
The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate stories. Hosted and produced by the HousingWire Content Studio.
