How credit card and auto delinquencies affect housing

Hinzugefügt: 2026-06-02

[00:00:09]Welcome everyone. My guest today [music] is lead analyst Logan Mohtashami to talk about serious delinquencies and renters versus homeowner credit profiles. First I want to recap the top five trending stories on housingwire.com.

[00:00:23]First up is CoStar buying Zonda, which we broke this morning, followed by NAR urging the DOJ and FTC to issue clear guidance on MLSs. Uh I think we need some more acronyms in that headline. Uh we also have an article asking if Zillow is now a public utility. And in fair housing news, we have groups suing the CFPB over the Equal Lending Rule. And of course, Logan's what happens to mortgage rates if the Iran conflict is over, still climbing the charts there, driving a lot of interest. Speaking of Logan, welcome back to the podcast.

[00:00:54]>> Chart Daddy number one every day this week for a reason cuz the drama actually, you know what? It's [clears throat] Friday morning and it's very calm.

[00:01:04]>> It is.

[00:01:04]>> a very, very calm Friday because I think a lot of people are coming to the conclusion that this is working itself to a deal.

[00:01:13]Um and uh it's just nice to wake up and not, you know, do a multiple videos on this headline or that headline.

[00:01:21]President Trump kind of talked about, you know, needing Let's Let's Let's get this together and let's get this done.

[00:01:27]Iran is kind of okay, let's get this together, but that could have been it, Sarah.

[00:01:32]That could have been the worst might be over and we we we move forward, but um you know, there was there was other economic news which I which I really like, but you know, for us, you know, we do the nerd tour, right? The and you know, you you 31 events to so far this year, you know, somebody asked me they're like, "How do you do it? That's a lot." And you you and I've had this talk, you know, you know, how do you get how do how do your energy? So I'm just give you guys like four key points for you guys who travel.

[00:02:00]Number one, y'all need to drink a lot of water.

[00:02:03]And anytime you can drink water, drink water at events.

[00:02:08]Uh number two, see I don't drink so it's not an issue for me. Some of y'all drink too much at events, okay? And you don't drink water, that's a very very bad thing. And number three, what the advice I gave you Sarah, you guys don't have to eat unhealthy food all the time at the events. I know they all have really nice meals they but if you can have a salmon salad, you know, if there's every time you can get a salmon salad, have one. And also bring your vitamins with you. And I always talk about, you know, [clears throat] omega fatty acid vitamins, you know, um make sure you try to stay somewhat hydrated, try to eat somewhat healthy, and then, you know, it'll you'll perform better. You're not going to be the chart daddy cuz our stuff is legendary and if you those of you who want to see the Nerdy Tour, hey, go press that HousingWire press that hwmedia.com.

[00:02:59]It's a religious experience, but the topic today is what we talk about the credit data.

[00:03:05]>> Okay, okay, we can jump into that, but you're not just going to throw out there and be like, like I told you Sarah, stop eating all this unhealthy food. Just want to make a note here that it's not like I eat unhealthy food all the time.

[00:03:16]But what happens is we get invited to these really nice dinners, they have really fancy food, and I'm not used to it. And and then I'm just like just throws me off and I'm like, oh, why do I feel so sluggish? So, I just want to put that caveat in there. So, I'm very >> you had fancy food and, you know, you don't need to eat fancy food all the time. There are a salmon, you know, stuff like that. But in any case, um you know, HousingWire we have an app now. HousingWire intelligence is is our way of teaching everyone your local area. But part of the Nerdy Tour is to teach the credit data. And what happened this week um the savings rate in America is now down to 2.6%.

[00:03:57]Uh that's the low of the year. And the average the 12-month average is running at 4%. So, the reason I wrote that article on Friday to show the credit data is that I think a lot of people are misreading the uh you know, the New York Fed 90-day delinquencies. Cuz if you look at the credit card and auto loan 90-day delinquencies it's pretty much at the peak of 2008 level or I think it was 2010 when when when when the peak was there. And a lot of smart economists are going on social media saying, "Hey, this is a very big concern."

[00:04:31]What I've always talked about it on the Nerd Tortoise that rental financials are different than homeowner financials. So, the charts that we put into that article really show the difference, but also the percentages that we show uh are much different than what the 90-day delinquency is. To make a very complicated story short because we we we we put the Federal Reserve article in there to try to explain that. Um if you get 90 days and on, you stay on the credit profile for a very long time. So, that's why the percentages can increase higher and higher, but the 30 days or the total delinquency data is actually been trending a little bit lower recently. And the Federal Reserve kind of goes into that to a degree, but it's not as dire as some people think it is because you see this for the last three or four years. They go, "Oh, the credit card delinquencies and the auto loan delinq" Guys, it is going to be June of 2026. There's no recession.

[00:05:23]Right? So, if you're using the credit data or the 1.2 trillion dollars of credit card debt cuz the 1.2 trillion dollars of credit it always rises in an expansion. So, that's obviously that didn't work out. Uh kind of read that article, kind of read how the Federal Reserve looks into it. I think the Federal Reserve hasn't done the best job of explaining this. And and it puts it in a little bit of context, but homeowners financials are so much better now in the last 15 years. But even if you compare them to renter financials, a lot of the overall stress is always going to be higher on renter financials.

[00:05:54]>> Interesting you say that. So, I was just listening to a recent episode of Animal Spirits. I know you love that podcast.

[00:05:59]You've been on that podcast. We like those guys.

[00:06:01]Um and they were talking about not only the uh car loan delinquencies, but the loan amounts, the monthly payments that people have on their car loans is so much higher now than it used to be. Like maybe 3 400 used to be normal. Now it's like 7 900 even a thousand dollars. Um and they were talking about how, you know, after COVID it just drove uh car prices in a in a really terrible direction. So, I think that that's different, too, right? So, it's not just like, oh, people have car loans, but they have really expensive car loans.

[00:06:29]>> Well, bigger the loan amounts and then, of course, short-term rates are higher uh um naturally uh uh when car prices rise, when everything rises, the borrowing costs rise cuz you have to borrow so much. Um it's one of the things about housing economics that doesn't get talked about a lot. If you have two cars and you're averaging $750 each, you know, it takes away some of your buying power away uh uh uh into that, but also uh auto loans never had a qualified mortgage.

[00:06:59]Uh that is one area that they did not want to uh uh put the qualified mortgage uh into that. Now, uh auto loans and credit card delinquencies are part of that article.

[00:07:10]You can see the uh charts and it it doesn't look as bad when you actually, you know, take the 90-day delinquencies and realize that that gets extended out and it stays on the credit uh data line for a very very long time, but uh that's just a reality of the post-COVID world. Everything kind of goes up in prices.

[00:07:29]>> Yeah, I think you did a great job in that article explaining kind of what's going on there and also the the charts you included, as always, very instructive.

[00:07:37]>> Yeah, I I think this week was was you You finally we're talking back to economics and a lot of people just took the savings rates falling and credit card delinquencies 90 days or you know, and they frame it like everyone's tapped out. No one's, you know, and then this has been going on for years now. This isn't just now recently. So, always remember every single year people consume a certain amount of goods and services.

[00:08:05]It's really rare like to have retail sales be negative in any meaningful way on a year-over-year basis, but hopefully that article not only talked about how homeowners are just so much in a better financial position. A lot of people forget there is used to be so much more bankruptcies filed before the 2005 bankruptcy reform law that the credit data's were a lot worse in terms of bankruptcies. And then when the 2005 bankruptcy reform laws came in, which nobody ever talks about. Sarah, literally, I think I'm the only person I ever talks about anymore. Uh all the credit data started to change and it kind of moved with foreclosures and now we have almost basically 21 years worth of data on this when those two laws were implemented. So, it just hopefully that gives a little bit of scale data and we added the Federal Reserve's article in this to try to explain why they're not so alarmed about the credit stress data and why we're still, you know, I mean if it wasn't for COVID, we'd still be in the longest economic and job expansion in history.

[00:09:07]Uh and everything's a process. Everything has to be modeled and and showed out, but there's a lot of that talk, which I actually love cuz we're we're talking less about the Iran situation and more about, you know, back to economics and the 10-year yields at last time I checked 4.44% and we can move forward with with with a lot of things.

[00:09:28]>> Love that. I love that we, you know, maybe we have taken a variable out or at least a variable that's going to affect housing. There's still lots to be decided, obviously. Okay, what other economic things are you looking at?

[00:09:39]>> Well, you know, going out now in the future, of course, we're going to get the tracker data by the time this podcast comes out. And just remember, we have the holiday week. So, for 2 weeks, the tracker data gets gets tilted. So, you don't really want to put too much weight into holiday data. But, we're getting close to that 1-year anniversary of the When did the housing market shift?

[00:10:01]>> Yeah, mid-June last year.

[00:10:03]>> Mid-June last year, but it's also shifted in a different way. I just think a lot of people saw inventories about to escalate. And so far, we just don't have a lot of data. When when rates go a little bit lower and demand picks up a little bit, you know, the ability for inventory to escalate out of control, just we don't have it now. After qualified mortgage kind of went in. So, I always frame it as credit channels running inventory channels.

[00:10:28]Since 70% 80% of home sellers or buyers, they're just sitting there and waiting for that house to buy. And inventory just doesn't have the ability to escalate up like it did from 2005 to 2007. But, going out in the future, we know we don't necessarily have a the extreme low bar that we did in 2025.

[00:10:45]Remember last year, the main talking point was all the existing home sales data from the month of June to October that will be reported in July to November will be positive year over year just because of the low bar and the forward-looking data held up a little bit better with higher rates. But, now, we don't necessarily have the low bar, but the pending sales, can we get 237,000?

[00:11:06]That was the forecast for this year in 2026. 237,000 more existing home sales than last year.

[00:11:14]If rates could stay 6 and a quarter under. Now, of course, that didn't happen after the conflict. But, can we get another little push going if rates could come down a little bit more and maybe hit that target? That'll be the interesting thing. And again, when you track things weekly, you have a a idea of it can it happen or not in late 2022 purchase application data was never positive year over year but our forward looking data Scott better for 12 straight weeks 12 straight weeks it gave us one of the biggest month-to-month home sales prints in history almost 400,000 and just in one month in mid 2024 purchase application data was not positive year over year but our forward looking data got better we said it this is going to be demand's going to get better we got a couple hundred thousand and last year the same thing we bottomed out in June we got a 9 month high in sales in December so course you can we get another one of these in the second half of the year and oddly enough our best sales data typically comes in the winter on a month on a monthly existing home sales base so we'll we'll see if that goes out in the future just kind of take remember the the tracker data does have the Memorial Day weekend variable into it >> Okay so you know like you said mid-June last year we started to see the the market shift because mortgage rates went down and so we so we had more demand so once we get into mid-June this year we've got harder comps from last year right because things were going better and we're not where are we like where are we with mortgage rates this year compared to mid-June last year >> So we're still lower year over year and it was really past mid-June that the rate started to get below 6.64 is that we have target levels that when we see our data improve it's usually when rates get below 6.64 and head towards 6 I think I've been on CNBC three four years in a row just saying the same thing you you don't need three four five but you do need near 6% as long as it could stay there see that's what we had earlier in the year we had near six no volatility oh could you imagine if we ran the entire year now knowing what we know that we had the snowstorm and the conflict a lot of people are nobody's going to buy a house nobody's going to file purchase application data with the war and all that." They did, you know, and but we'll see if we can catch catch up on this.

[00:13:34]>> So exciting. Can't wait for this weekend. Maybe like I said, maybe by the time we listen to this it'll be Monday. Maybe you would have had a >> Just know I had 2 days of really good Call of Duty play.

[00:13:44]>> [laughter] >> We need to know all about that. And thank you for sharing your health tips at the beginning. You know, that that's funny, but literally you do have a lot of people ask you about that. I know even when we're at events people ask you about that because you always have so much energy and you just run around stage and you you know, you do event after event back-to-back and so you think of it as kind of like being in season.

[00:14:05]>> As my high school basketball coach once said, "Coach or actually Captain Motashawmi has unmatched enthusiasm."

[00:14:14]And [laughter] that's never changed, right? And part of that is all of that is physically have to be able to do that and you know, I'm not not uh not 21 anymore, of course, but when you're 50, you really got to make sure to take care of the body.

[00:14:27]>> Oh my gosh. Well, appreciate you as always Logan and we'll talk again soon.