The good, the bad and the ugly are back for mortgage rates

Added: 2026-05-30

[00:00:09]Welcome everyone. My guest today is lead analyst Logan Mohtashami to talk about what the Iran peace deal, today's economic data, and the Fed's stance on inflation mean for mortgage rates.

[00:00:20]As always, I want to thank our sponsor Total Expert for making this episode possible.

[00:00:25]And I want to recap the top five trending stories on housingwire.com.

[00:00:29]Logan's article on what happens to mortgage rates if the Iran conflict is over continues to dominate. And then we have housing markets are adapting to higher rates instead of freezing.

[00:00:39]Next is Two Harbors stalls on CCM merger approval. And two on Zillow, we've got Zillow and CoStar continue to spar over Matterport 3D tours.

[00:00:49]And RealTracks may suspend Zillow listing feed on June 1 over IDX rule.

[00:00:54]You can read all of the incredible content with the code podcast20 to get a 20% discount on a subscription.

[00:01:00]Okay, ready to dive in? Logan, welcome back to the podcast.

[00:01:04]>> It is wonderful to be here. What a week.

[00:01:07]What a day.

[00:01:09]It's Thursday morning and the last 16, 17 hours were a lot of drama, but really, really beneficial for everyone listening uh to this podcast today on kind of like now mortgage rates, is it just the conflict or economic data or the Fed or all together? I feel like you know, the good, the bad, and the ugly, you know, where they're all staring at each other and we can finally put all three characters into kind of the same plot now because I thought what happened Wednesday night and Thursday morning and everything where we are right now, the 10-year yield is right at 4.46 percent, uh kind of that first target level, and we're going to try to make sense of it all to move forward.

[00:01:54]>> So, when you say what happened on Wednesday night, Thursday morning, you're talking about the fact that we did get a deal in place. Um it is sort of like a kick it at things out 60 60 days out, but that's stabilization, right?

[00:02:06]>> Well, actually, Wednesday night, we had missiles and drones and 24 and Chloe and uh Kuwait was being shot at and uh uh evening trading the 10-year yield went up to 4.53, oil prices went back up, there was all these negative headlines, you know, and then you just kind of wind down to the morning cuz, you know, evening trading tends to get a little bit more hectic. Uh uh so we're sitting there thinking, "W- Is the deal on? Is the deal off? What's happening?"

[00:02:38]Then economic data came back to play.

[00:02:40]And it's really good to see the bond market react to economic data today cuz the economic data we had yesterday was softer than anticipated. Uh the PCE inflation data is breaking out, but the core aspect, especially the super core, of PCE inflation, that was a smidge lower than what people are expecting.

[00:02:59]But with the consumption data, GDP, jobless claims are still very low. Um real wages are negative now because oil prices are taking up, the savings rate has fallen. You put all these together, 10-year yield fell a few basis points right off the way. So, we're back to maybe, you know, economic data being another variable. So, we got one of those characters uh uh in there.

[00:03:22]Um and then, you know, we had some Fed governors make some statements. William has talk talked about, you know, maybe product higher productivity can bring higher real rates. You know, so we had a lot of things going on. Then on top of all that, the 60-day truce, ceasefire, whatever whatever we're calling these things these days, that came off and it took the 10-year yield down a little bit lower right to that 4.46 level that we talked about in the article uh or the holiday weekend and on the podcast before. So, here we are. I thought it was a really good day to say, "Hey, we got all we got all the three people back." You know, we got the good, the bad, and the ugly. They're all back in here again, right? And I think that's where you want to be.

[00:04:07]You didn't want to be where we were the week before.

[00:04:11]Where the 10-year yield is at 4.68, oil inventory is falling, we're about to summer months, so you know, we're going to hike rates, everything. We're starting to get back to something maybe normal, but with more players involved and we could we could work with that without worrying about, "Hey, what's the oil price? It could go to 150, 170. The conflict is getting worse." and everything. So, in a strange way, it felt like a normal day. There's [laughter] multiple things that we're talking about and and you know, it's a it's all a healing process, working your way back to normal, but I thought it was good to see that the bond market reacted to a softer economic data today.

[00:04:52]>> So, what do you think about people who are like, "How did you get to that exact level?" I've heard that some of that this morning where it's like, "Logan, how do you know these things?"

[00:05:02]>> Well, I just we just we we we observe where bond market is and everyone's got their own technical levels and stuff. I know a lot of, you know, a chartist is a chartist in in in pure form, but the way the bond market was reacting around that 4.6 level where it was a quadruple top. Like, you know, we were we were having a very hard time breaking above that and then when all hell broke loose, we broke above that and all hell broke loose on the 10-year yield after that. So, that would to me it's always the natural first target. That's the key level back then. So, we get there.

[00:05:35]And we got there because there is a format of a deal in place or a ceasefire and they could talk about the nuclear program 60 days later. In any case, the worst-case scenario that I'm always concerned about after March 21st, of escalating and not knowing how to close this out.

[00:05:55]Because that takes you to a whole different ballgame. Uh um and to me that's slowly, methodically, with crazy headlines being taken away. And at least we're going to we're going to have so many skirmishes. We're going to have so many people who want the war to continue, but for now at least that aspect is gone. Then we can go back to economic which I think would be positive. You know, if if the economy's booming and everything's great, then then it is what it is, but if the economic data's slowing down and then the conflict is ending, then the third variable, right? The good is the economic data, the bad is the conflict, and then the ugly is the Fed.

[00:06:34]So, here we are. You know, my God, the kids Sarah, the kids have probably never even seen The Good, the Bad, and the Ugly.

[00:06:42]>> Go go watch it, everybody.

[00:06:44]>> No, no, you guys you you kids, you guys got to go watch that. It's great stuff.

[00:06:48]It's like me versus the doomers and then the crazy doomers. Um in any case, uh now the onus is maybe a little bit on the Fed again.

[00:06:59]You know, it's easy when you have an escalating conflict with rising inflation and oil prices going up, but but homie, what if the escalation of the conflict is slowly winding itself out and the economic data gets a little bit so Oh, the ugly's back in the game now. We're all looking at each other. So, here we are. The onus is now on the Fed to start maybe changing their rhetoric if that is the case going out in the future.

[00:07:26]Right? If we go out into the next 4 to 6 weeks and the economic data's a little bit softer, what does the or what does Beth Hammack say? What does Lorie Logan say? What does Austin Goolsbee with that smirk of his say? What does Neil Kashkari saying at that point?" Because they they totally 100% back the escalation of the war. I totally get that.

[00:07:50]But makes their job a little bit more difficult if if the data gets softer over the next 6 weeks and if we're moving toward a ceasefire. Uh and can the Beth Hammacks and the Lori Logans and the and and the others come out there and talk about rate hikes, rate hikes, rate hikes in that which the irony was yesterday the >> no, you you this is the this is what I was going to say. This is the craziest thing, right? The only person on who's saying what President Trump would want somebody on the Fed to say is who?

[00:08:24]>> Lisa Cook.

[00:08:25]>> Lisa Cook.

[00:08:26]>> Fed Governor Cook who Trump wants to fire and has done all these kind of crazy out of the norm things to to to put her in the spotlight. She's the lone dove. So the irony of having two doves, two star-crossed economic lovers right there, right?

[00:08:43]Kevin Warsh and Lisa Cook are the lone doves left on the Federal Reserve which I I thought it was funny, you know, just just reading that. So the irony of that is it's a crazy world, man. This is nuts. This is this whole year has just been just been just crazy factor after crazy factor, but uh Kevin Warsh has won somewhat of an ally in uh uh um Lisa Cook. I can maybe put Mary Daly in there, maybe.

[00:09:14]That's a bit of a stretch, but but now I think the fact that we're talking about deals and ceasefires and negotiations maybe the worst case for the Federal Reserve is is slowly abating. So for me going out the next 6 to 8 weeks is that if the economic data gets softer does the Fed change their rhetoric?

[00:09:36]Do they move into another side and instead of putting, you know, their head down and going, "Hey, listen, we're going to talk rate hikes." Cuz the Fed doesn't just raise rates one time. You know, it's not like, "Oh, we're going to do one more hike." You know, usually if they stop hiking, they cut a little bit and they stop. Usually it's multiple rate hikes. You know, kind of Neel Kashkari talked about that. We we have maybe do multiple rate hikes. But now, it's fair game now. Now everyone's everyone's in the open and choices have to be made. Uh verbage, whatever is being said by Fed governors now, uh maybe have to cut consider the possible ceasefire working to an ending and then this is why it's really critical to get ships flowing.

[00:10:21]Right? The Neel Kashkaris and the Austan Goolsbees cannot hide behind uh the Middle East thing if ships are flowing and oil prices are going down. So, it is very, very key to get oil prices down, get diesel prices down, and try to get to that other side by minimizing the damage as much as possible. And then, you know, real wages can can can look better again, unlike the data we saw today.

[00:10:46]>> Okay, I just before we leave the topic of Lisa Cook, I just have to give her kudos for the fact that if you wanted to be political about this, if you're Lisa Cook, and you have been the president of the United States has come after you very specifically personally, I mean, but she stuck to what she thinks is right on an economic standpoint, which happens to line up with what he wants. And she's sticking to that. She's done that the whole time. She's never wavered. It's not about if he likes her or not, what he's doing. So, I just want to say, I mean, that's, you know, someone who is has a lot of integrity to what they think, you know, the data's telling them and and what they do. So, just wanted to bring that up cuz that's that's pretty incredible.

[00:11:24]>> Yeah, I mean, and and not only Lisa Cook, but Powell, you know, it's all about the Federal Reserve's independence in that and you know, trying to take over the Federal Reserve by putting your government Remember this this all started in 2024, you know, with Scott Bessent and the shadow Fed president and and trying to get I mean Stephen Myron I to the life of me before I die I'm going to I'm going to think to myself Stephen Myron was a Federal Reserve board member during this whole crazy thing. He should never have even been part of the process, but in any case with Christopher Waller becoming hawkish now you know, that whole numbers game just blew up, but in any case even a Christopher Waller going out in the future does he change his mind? But again, the economic data has to get softer with scale for them to to move this because the growth rate of PCE inflation and everything and there's just like weird stuff with the inflation data with chips like you know, if you're buying a computer here and then they're going to incorporate their chips 6 months later. Well, that chip prices just doubled, you know, so there's just some there's really there's just some crazy stuff out there on the world economy side, you know, is China really importing any oil? They're trying to hold things together without having oil prices take off. So in any case, I thought I thought today was a good day that we got everyone back in the ball game again cuz if it's just the escalation of Iran and oil prices going up and rates are going up higher higher.

[00:12:56]It's just there's you can't operate in this environment because everything is about Iran. I mean all the tracker data is when we talk about hey, the economic data for the next week. I'm like forget about all that. It's Iran Iran Iran, you know, now I get I'm getting a feeling we could get back to it, right? Back to economic data back to the Fed and yes, the conflict is not over. We need ships going, but at least at least it's so much better this Thursday morning than last Thursday where you know, so uh >> Absolutely.

[00:13:27]>> Small small steps, you know, uh what was the movie Contact?

[00:13:32]Do you ever see the movie Contact?

[00:13:33]>> Oh, yeah.

[00:13:34]>> With Jodie Foster?

[00:13:35]>> Jodie Foster.

[00:13:36]>> forget that line, small steps. That's how we've been doing it for billions of years.

[00:13:40]You know, >> [laughter] >> this is like, "Lady, this is how we've done it for billions of years, small steps. Don't go for it all, just small steps, work it over."

[00:13:48]And I think that at least is much more beneficial for everybody in the mortgage and real estate industry than what it was exactly a week ago.

[00:13:56]>> talked about steps, sort of if we want to see rates fall, and once we take the Iran conflict sort of out of the equation, at least like out of that daily equation, just look at the economics, you outlined three kind of three ways to get back down towards 6%. Where are we in your in that diagram of like, you know, it's not going to happen overnight?

[00:14:18]>> We're we we are we are just we just hit step one. Step one is if the conflict is ending, we should get to 4.46 on the 10-year yield, okay? So, that's that's that's the easy layup.

[00:14:30]Um after that, it gets a little bit more challenging.

[00:14:34]With better spreads, it doesn't it doesn't take too much to get rates between 6 and a quarter and 6 and a half, so hug a mortgage spread, of course, but uh we need chips to flow, right? We need energy prices down. They're still very elevated. We need diesel prices down, and we need it with duration. Uh so so this is just a very very very first baby step, but at least it's a baby step in the right direction, right? Because where we were heading, I kid you not, man, it'd be like the show 24 on steroids. You could put orange clockwork in the middle of the 24 show. That's how crazy it would have gotten from June to September. And if I'm saying this, I trust that there are people in the White House and the economic team who have, you know, people who are trained in this kind of field that say, "Hey, listen, this is not good. You're getting past this level. This is not so hopefully at least I at least I believe that all kind of made sense and when the 10-year-old got up, they just let let's let's get a deal. Let's let's let's get past this side of the of our history and and economics.

[00:15:41]>> Okay, well, I am all here for it. Yay.

[00:15:43]Okay, let's talk about two two things.

[00:15:45]Um Thursday morning so that's jobless claims. What do we see there?

[00:15:48]>> Jobless claims just ticking up a little bit still. Um what we talked about since what late 2022, Sarah? We do not want to go into the recession talk until jobless claims four-week moving average heads up toward 323,000.

[00:16:03]We said we forced people to just believe in that principle. It's almost June 2026.

[00:16:10]By the way, for the individual who said the US went into a recession in October of 2026, how do you like them apples?

[00:16:16]Never happened. Have a working model that works.

[00:16:19]In any case, um >> Wait, wait, you said you said of of >> Somebody who somebody that's very well known said the US went into recession on October 2023.

[00:16:28]>> Oh, 2023. Okay.

[00:16:29]>> Yeah, 2023. So, that never happened because this individual is a constant doom porn specialist and he's just absolutely an abomination to everything that we stand for in economics and it is our path to go after these people 24/7.

[00:16:42]We had people talking about a foreclosure crisis yesterday on X. So, Sarah Wheeler, you did a wonderful job at the Rudy LaBelle conference. You took that giant picture of me with that giant huge foreclosure chart when you took it.

[00:16:55]>> huge huge chart behind you.

[00:16:56]>> You took it right when I was pointing that finger on that foreclosure data where I say, "This is their foreclosure crisis. It's not even to pre-COVID levels yet. It's not even to 2005 levels yet, homies. These people are absolutely on drugs, insane in the membrane 24/7.

[00:17:13]Y'all, these people have lost it, man."

[00:17:15]And they were like, "Oh, foreclosure crisis." You know and I was just like, you're all you're all on drugs. There's just no way you could you could testify this. I digress. In any case, jobless claims got up to 215,000.

[00:17:27]Still very low historically. Again, the demographics of our labor force are much different now. Right? That's why I always say, no country has a Dorian Gray labor market. We all age, retire, and die.

[00:17:40]Right? And in death, we need to be replaced by another consumer, another worker, so the unemployment rate can look a lot different now going out for the rest of the century, especially if labor force growth and population growth are slowing down. So, jobless claims still low. Picked up just 2,000 more than estimates. Nothing nothing bad there. But new home sales came out. That was the second thing. And, you know, in that article I just highlighted, there's literally not much going on. But the new home sales data is very confusing cuz like the new home sales purchase application data, which the MBA has once a month, it's at post-COVID highs.

[00:18:16]Like if you saw that data like I show that data line to people like, what?

[00:18:19]Yeah, I said, yes, but if you look at it, we're just in a back-and-forth channel with new home sales for years.

[00:18:25]And they're just managing the market right now.

[00:18:28]>> explain this because when I was editing the article, you explained this to me and then and then put in writing, which I thought was really good. What you mean by that is like we'll have something that looks like it's a multi-year high and then it's like multi-year low. Oh, and then it's multi-year high. It's like, how do you make sense of that?

[00:18:43]>> you you you you you just new I mean, new home sales and housing starts are very volatile month to month.

[00:18:48]That's how the census is. It gives you like a 16 to 18% difference that it could be revised in.

[00:18:54]But in any case, we had a multi-year high in like November of 2025, and then we had a multi-year low in January. Of course, the data was like, you know, we had the snowstorm and everything and nobody was reporting BLS data for a while. But in any case, it really hasn't gone anywhere. But the problem with the builders is that that total units of completed for sale. That's the one that I always hang my hat on and that's the one that forced me to write that article in December of 2024. Like the builders finally have a supply and demand issue because they don't really like to push the lever here with housing construction. We're still building homes. We're just not growing like some people wanted. So new home sales fell a little bit. I'm sure this number gets revised, but in any case it really just hasn't gone anywhere. That's why I like to show those 10-year charts with new home sales. If you take the COVID bump away and you take the lows in 2022 which took mortgage rates from 3 to 7% in one year really has done nothing. We just kind of go back and forth and the builders confidence index is not screaming. Here we go. Here we go. Yo, here we go.

[00:20:00]Sorry. In any case um >> You digress again.

[00:20:03]>> I digress. I'm thinking 80s, 90s. Um then you know, what do we think about is the builders have to just wind down that total completed units, get a little bit more in demand and then they'll feel a little bit better. And just remember that builders confidence data that we show all the time, that's tilted to small builders. That's not the big publicly traded builders that have a lot more money, a lot more profit margins to work with. So we're just kind of stuck and and if you just look at it in the last 10 years, you didn't realize what happened in COVID in 2020 or like it's really gone nowhere for for a very long time.

[00:20:36]>> Okay, well we are obviously this is going to come out on Friday and so I'll just say wow, you could actually have a weekend Logan that you weren't you know, where there weren't like hourly updates on the conflict that that pushed things one way or the other. Maybe you'll have a weekend this this weekend where you don't have to be so crazy.

[00:20:56]>> I'm going to have a weekend where I can play Call of Duty for about [laughter] 30 minutes without checking to see what's going on in the news and I'm going to love it, man. I'm going to love it. I don't think I'm going to have a donut this weekend and a slider, but I will get to relax, have a diet Pepsi, >> Treat yourself, man. You know, treat yourself.

[00:21:17]>> do the Q&A's on Instagram stories 24 hours, write the tracker article, uh uh and maybe maybe maybe P I'm jinxing it probably probably you know, it's probably going to be the wildest weekend ever, but maybe we're we're working toward that next stage. That next stage is peace, Wheeler.

[00:21:33]>> That could be really good. Logan, thank you so much for being on and for keeping us updated throughout this whole thing.

[00:21:39]I mean, just constantly. Really appreciate that.

[00:21:41]>> Pleasure. And by the way, for the few people that are asking, no, I am I did not brush Jack Nicholson's teeth.

[00:21:49]That was an AI video out there. So, uh no. The AI video of brushing the teeth and shining, no. That wasn't real, people. Come on.

[00:21:57]>> Come on. All right, we'll talk again soon.