On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about tariffs, mortgage rates, and the difference between single-family and multifamily delinquency data.
Related to this episode:
No, homeowner delinquency rates aren’t elevated | HousingWire
https://www.housingwire.com/articles/no-homeowner-delinquency-rates-arent-elevated/
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.
Related to this episode:
No, homeowner delinquency rates aren’t elevated | HousingWire
https://www.housingwire.com/articles/no-homeowner-delinquency-rates-arent-elevated/
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.
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NewsTranscript
00:00Welcome, everyone. My guest today is lead analyst Logan Modushami to talk about tariffs
00:11and mortgage rates. But first, we're going to talk about single family versus multifamily
00:15delinquencies after that topic blew up on social. Logan, welcome back to the podcast.
00:21It is wonderful to be here and thank you all for the multifamily delinquency chart that
00:28everyone sent to me right away for me to kind of bring that down to reality. That was over
00:34the weekend and people are still even talking about it today that, you know, what was this
00:39about? And I've done this for 14 to 15 years. And in the last decade, I used to deal with
00:45the Russian trolls. The Russian trolls were it was basically an act of war in America
00:49doing all these fake accounts and disinformation campaigns. And a lot of what the anti-Central
00:54Bank movement does is what the Russian trolls used to do. You could combine them same sentence
00:58structures, charts and everything. But this one was so egregious that it went viral. I
01:05think the original person who tweeted it out had like five million views and that everyone
01:10tweeted it out and everything. But the fact that everyone kind of somewhat knows it's
01:15full of, you know, and the fact that I'm willing to challenge any American citizen because
01:20you guys don't realize you don't forecast. Quit. Quit pretending that you're a data
01:27analyst or economist. So in this context, everyone understood, hey, this doesn't look
01:32right. And then we came in and wrote an article and brought the single family delinquency
01:37audit and and all this stuff. And it's so good to see the pushback, because what do
01:42we say? Men in this country do not know they're part of a cult. They get manipulated by
01:48these YouTube sites and they go down a rabbit hole and they age. And it gets harder to get
01:55out of cults when you get older. So I am here 24, seven live. If anyone wants to debate
02:01me on this, please.
02:04So even more context, there was a chart that actually Freddie put out and it has the name
02:09on the chart, right? It says multifamily wasn't it wasn't it wasn't necessarily released by
02:14Freddie Mac. It was it was it was done by the the Dune Porn Network. And it's the Freddie
02:18Mac seriously delinquency data that the headline of the chart, it says housing. Six million
02:25people are behind on their mortgages and then they show a multifamily chart on like.
02:30And the visual is to manipulate men. Why? Because men are easy to manipulate. So here it
02:35is. They see that. Oh, I was in 2008. Oh, my God. And this is what happens. So you don't
02:42if you're doing a, quote, unquote, six million mortgage people are questionable on that
02:49number. But in any case, you would actually put the homeowners percentage.
02:52Oh, wait a second. We can't put the homeowners percentage chart because it doesn't look that
02:57bad. Right. So tactical. The Russians used to do this all the time and now it's Americans.
03:04So when it's Americans, it's domestic. And when it's domestic, we got to take care of
03:07business. Right. And it just it's it was so wonderful to see everyone kind of like, what is
03:13this nonsense? Yes. So for people who are not perpetually online. So Logan is I mean,
03:1924-7 online. I'm just one notch below you, Logan. I'm pretty online. But even I don't I
03:26don't swim in the same waters. Right. So there was this viral post. Like you said, it went
03:31crazy. And then everybody was sending it to you going, wait a minute. Wait a minute. What
03:36does this mean? No, I don't think this is right. This can't be right. You know, this isn't what
03:40you've been saying. And so it was a great opportunity for you to be like, yeah, you're
03:44right. They recognize that there was something off about this. And the whole thing that was
03:48off is that they were they were saying that, you know, oh, multifamily looks terrible. But
03:52they were saying that about homeowners. And it just didn't even make sense.
03:56Northerners never forgot the red wedding. And I'm never going to forget this chart. So it's one
04:03thing for these clowns who hide behind fake names and don't even show their faces, whatever
04:08their cowards or frauds. It's disinformation war versus somebody who believes in math, facts
04:13and data. So I've always said the academic society have allowed these people to go untouched,
04:20unscathed. Me, I want them in front of a TV camera. This is the United States of America,
04:25not some third world country running around with professional grifters doing weak ass
04:29charts like this. We want the battle.
04:32I know you do. OK, well, let's get into the information part of it. Right. You talked about the
04:36disinformation. What is the delinquencies, whatever you want to get into on homeowners versus
04:40those apartment, the multifamily and what does it mean?
04:43So the single family delinquency data is near record lows, right? Because majority of the
04:49loans that are being done in the last 14 years were Freddie and Fannie. This wasn't any like
04:52portfolio Wall Street loan. So they don't ever really they don't ever show that charge because
04:57there's not much going on there. So now they've tagged it on to FHA. So what I've done is I
05:01waited 24 hours because this is what I do tactically. I show the FHA delinquencies with V.A.
05:07and then Freddie and Fannie. And there's nothing abnormal about it.
05:12There's 51 million loans in America.
05:14There's 40 percent of homes that don't even have a mortgage.
05:17You don't see the foreclosure data take off, not because of FHA is holding stuff back.
05:22It's just there's so much nested equity out there that if there's people out there that have
05:26were in stress, one and a half to two million people lose their jobs every single month.
05:31And some of them have sold their homes and you never hear it about it.
05:34When we see stress in our data line, we see it in the new listings data.
05:39Right. And that's why, you know, we always highlight Mike Simonson was the one that went to
05:43Lehman Brothers and told him, hey, listen, we track this differently.
05:46It's wrong. Lehman Brothers was one.
05:47No, no, no. We're good. Goldman Sachs took it.
05:50We are the data miners of this country.
05:53Right. We'll be we'll tell you if it happens, but this is not it.
05:58Right. And for something like that to go around and it's just it's
06:02wonderful for me to watch that people are fighting back now.
06:06I know it because I've done this for 14 years.
06:11Chicken. OK, well, let's OK.
06:14We've talked about the single family data.
06:16Let's talk about that apartment data.
06:18Are you worried about what you see in the delinquencies there?
06:21Well, there's what we've what we always talked about is that the rollover of debt
06:26for the apartment construction.
06:27Right. And we highlighted this in our in our recession model that we need to keep an eye
06:32on the apartment label first, because that was actually taking off when single family
06:37permits were falling. And now that permits are at lows.
06:40When those units get completed.
06:42Right. We're going to have a lot of loans go under.
06:45All right. And banks that are tied to that.
06:47If there's any kind of crisis, what I believe, and I've talked about this for two
06:51years, I think the Federal Reserve is going to merge a lot of things.
06:54But this is not in a consumption based economy.
06:58This is not going to be the variable that destroys anything.
07:01Right. It's the consumer.
07:03Right. If consumers spend less, there's there's your problem.
07:06If we have less investment, there's your problem.
07:09This is a individual credit issue for a lot of people who got into a very, very
07:15hot marketplace with very low rates and then rates have gone up.
07:18And now, you know, it's kind of like what you say about Canada, like Canada has 90 year
07:22more loan modifications because they have they're tied to short term debt.
07:27So this is the problem with having short term debt tied into a sector that if rates
07:32shoot up so fast, you get hit out there.
07:36So plus the irony is that this thing has been the bottom base was in 2019.
07:41Actually, this thing has been rising for years.
07:44Right. And people go, well, it's six months out, six months out.
07:47No, it's 2025.
07:49OK, people were saying this in 2022, 2023, 2024.
07:52Now we're 2025. Other variables are more important tied to the economic cycle than
07:57this. So there's going to be losses.
07:59They're going to be investors who get hit.
08:01There's going to be a reduction in value for apartments.
08:04They're going to be some apartment deals like crazy coming up.
08:07But this is not the single family.
08:09This is not Housing 2008.
08:11And if you all want some, you know where I'm at.
08:14Well, let's dig into because we had a lot of news, as always, over the weekend and
08:19then coming up against is it Independence Day tomorrow, a tariff day, whatever you
08:25want to call it, which is when this podcast will be broadcast.
08:29What are we seeing in the 10 year yield and mortgage rates ahead of that?
08:33OK, so it's Tuesday morning.
08:35A lot of the economic data has been coming softer, of course.
08:39But the ISM new orders data really tanked.
08:42And because that data line tanked, the 10 year yield started to go lower.
08:48But the job openings data was OK, wasn't terrible, wasn't great.
08:53I wouldn't call it a game changer.
08:55But I think the Atlanta GDP now is negative three point seven percent.
08:59Even after you make the adjustments to trade in gold or whatever, it's still a
09:04negative number. Everyone's kind of mindful like of what's going to happen today.
09:09It's Liberation Day.
09:10So we'll see what it is.
09:11But you are going into Liberation Day with softer data, even after we make some trade
09:17adjustments. They counter to this as being that, well, part of this is weather and
09:21everything. The second quarter, things will bounce back because we have a lower bar.
09:25You can make a case for that.
09:26But I think in this case, the 10 year yield was a four point one four percent at the
09:32lowest. We've talked about this for six weeks.
09:33This is a tough level to crack.
09:36Right. We highlighted in the tracker.
09:37We've thrown everything at this thing.
09:40The only thing that this data, this 10 year yield level has has been able to hold up
09:44the labor data hasn't broken to even get worse.
09:46So we have jobs Friday coming up.
09:48We have Liberation Day right now.
09:51Today, we'll see it, I think, at the close of the market and we'll see how the market
09:54reacts to that.
09:56But as we could see, things are a little bit more active, you know, than than what
10:01we're used to. So you try to make sense.
10:03Remember, focus with data.
10:05What is the big variable stuff that you kind of want to work with that?
10:08But we'll get some clarity with the tariff percentage.
10:12Right. That's the big question right now.
10:14So, you know, here we are Tuesday, one day before and we don't know what to expect.
10:18He's going to do it at one o'clock.
10:20It's going to be one o'clock p.m.
10:21Eastern. OK, all right.
10:23And it's not Independence Day.
10:24That's what I called it. What'd you say?
10:25It's Liberation Day.
10:27OK, so it's it's possible like he is at one o'clock.
10:31He's like, listen, they've already done their job.
10:33We've negotiated this great these great deals.
10:35So this and this and this are off.
10:37On the other hand, you have you know, you have it seemed like over the weekend
10:41he sort of ramped up what he wanted to do with tariffs, even maybe above what
10:46some of his advisers were saying.
10:48So it's really hard to tell what's going to happen.
10:52Normally, I would say it's a trade war tap dance because, you know, you don't really
10:56get into it. And this is a good conversation to have.
11:00Twenty eighteen and nineteen was different.
11:03Right. Somebody showed me a video of some guy saying, oh, Trump is purposely doing
11:06this because he wants the stock market to crash so they can cut rates, you know, in
11:10this. OK, so what happened in twenty eighteen and nineteen, it was a very small
11:16trade war tactical dance.
11:18The growth rate of inflation was falling.
11:21Right. We didn't have the Michigan survey indexes go parabolic on the inflation
11:25expectations or down.
11:27The economy is in a different state right now.
11:30The tariffs are much bigger.
11:32So it's not the twenty eighteen nineteen.
11:35Now, I normally would say he would just do that, whatever, call it off, go for a little
11:40bit, make it make a deal, whatever, whatever that is, art of the deal.
11:43Right. That's what Trump does.
11:44But the problem with bluffing so much now, you know, since we started is that you have
11:50to eventually do something because everyone's just going to say, hey, and that's the
11:55concern about something like that is when you're in a chaotic period in time and you
12:01feel like you're forced to do something you don't want.
12:05Then I have the Federal Reserve, who's kind of doesn't really know what to do with this
12:10yet, even though they said we shouldn't raise rates going into a trade war because
12:15it'll create a recession.
12:17That means their labor debt. So the irony is that the 10 year yield has fallen.
12:22Right. Even though the some of the data lines, the price is paid.
12:25I know there's a lot of inflation, early data lines that are showing more disinflation
12:29than inflation. But in any case, you are more prone to make mistakes.
12:34In a chaotic time.
12:36But you're also more prone to do something if you feel you have something to prove.
12:40Right. And that's that's that's that's the concern.
12:43Like if it was always a trade war tap dance, then you make some deals.
12:47Or let's say Trump does this for one month and then he makes some deals.
12:51But from that point on, you know, you can you can do something that you never originally
12:59intended to do. That's that's my concern.
13:03And we'll see. We'll see what it is.
13:04We'll see how long it is as well.
13:06But as we can see, we kind of ran into this with a different kind of economic backdrop.
13:12And now everybody's kind of thinking about it.
13:15Businesses are thinking about if you look at the manufacturing surveys, they're all
13:18thinking about it. And it's going to be a chaotic year.
13:23But our job is to try to make sense of it and keep people in line.
13:27And we'll see where the purchase we're doing this early in the morning.
13:30So we don't know what the purchase application data is yet.
13:32But on the housing side, even though with all these chaotic headlines, it's the first
13:37time that purchase application data is positive.
13:40Our weekly data are now positive.
13:42You know, it's much different than last year.
13:44Last year was a very negative.
13:45Tell why. Because mortgage rates were heading towards seven and a half percent.
13:48And the this time, the from the peak of January 14th, the 10 year old mortgage rates
13:54have been slowly moving lower.
13:56So we are close to being at the lowest point of the year on mortgage rates, correct?
14:01We're close. The 10 year yield is very close.
14:04The spreads on these days where yields really drop down, the spreads really are
14:10negatively affected. When the yields go up, they get better.
14:13You need more rate cuts like, you know, to get that next stage lower out there.
14:19I know there's a lot of stuff.
14:20There's a lot of people talking about, of course, all of you can understand why the
14:24White House want lower mortgage rates and lower 10 year yield.
14:27Imagine this trade war talk and the 10 year yield is at five and a half and mortgage
14:33rates are at eight percent.
14:34It's not going to work well, right, because you don't have the kind of the you don't
14:38have wages growing as fast as they used to.
14:41It becomes more problematic.
14:43And it's just one of these things where you're dealing with so many fast headline
14:48variables that you can get confused.
14:50And I get that. And part of the reason why we wanted the trackers, we wanted everybody
14:55to kind of kind of stay on the same page.
14:59And so far this year has been good.
15:00I mean, I look at housing a little bit different than everyone.
15:02I want slower price growth.
15:04I want more inventory.
15:05I want a more stable housing market.
15:07I'm getting this. This is why last year I was happy.
15:10And this year I'm even more happy because the forward looking demand data are getting
15:13better without rates getting to my target level to where we see real growth.
15:17That's a positive thing going out in the future.
15:20If home prices were rising eight or 10 percent negative, if inventory wasn't growing
15:25negative. But here we're starting to get some balance out there.
15:28But that's the tracker and housing.
15:30We can control that. We have those set variables.
15:33The economic side is just kind of all over the place right now.
15:37All over the place. That's a good way to describe it, I think.
15:40Everyone's trying to adjust.
15:41And really, we don't know until he he talks about it.
15:44So I guess we'll keep this one short.
15:45And with the with the caveat that you will be writing something up if something big
15:51happens on mortgage rates. So people should be keeping an eye out for that.
15:56For all of you that are part of the Instagram family, that key technical level has held
16:00now a few times with crazy headlines, stocks selling off weaker economic data.
16:05If the labor data starts to get weaker, look for that 10 year yield to go.
16:09I know I'm a hoarder.
16:11I say it wrong or whatever.
16:13But getting that 380 level is in play.
16:16That is the low level of the forecast for this year.
16:20So we're not that far away from it.
16:25So one or two real bad labor reports and you can get a swing out there.
16:29And and it's just it's I don't know.
16:34I don't trust men enough in chaotic times.
16:39This is why I always say women are more stable and sensible and everything.
16:43But men, men get there.
16:44I mean, even for myself, like I like I want to challenge every single person on planet
16:49Earth right there. But in this environment, oh, man, you're prone to doing something that
16:56you might not want to do.
16:57And you people have to just settle down and then think about something and be a little
17:02bit more tactical.
17:03So I'm assuming that there's probably a little bit more tactical stuff going on in the
17:07background because you can't be saying, oh, I haven't decided yet.
17:09I don't know what to do. So hopefully there's a little bit more conversation on on what
17:15the short, medium and long term game plan.
17:16But we could all see why they wanted lower rates from November, because this would have
17:22been a much different conversation if the 10 year yield had shot up and yields are up
17:28and mortgage rates are up than currently what we're dealing with.
17:31That would be bad.
17:32That would be especially bad for our industry.
17:34Logan, thank you so much for being on.
17:36Love your passion and your heart about these topics.
17:39And we will talk again soon.
17:41Talk soon. And just remember, the Northerners never forgot the Red Wedding.
17:45And I am never, ever going to forget that multifamily chart ever.
17:49I don't know what that reference is.
17:50So I'm going to have to go with Game of Thrones.
17:53Oh, that's why. So it's not an actual reference in history.
17:56No, no, no.
17:57There's a scene. I'll have to show you the episode one time.
18:02I was like, I don't remember this.
18:03What is this? OK. All right.
18:05Thanks, Logan.