What Happens When Rates REALLY Drop? Probably Not What You Think w/Logan Mohtashami

On The Market

BiggerPockets

Investing, News, Education, Business

4.8 • 858 Ratings

🗓️ 16 September 2024

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

Are we finally at the end stages of this harsh housing market? With housing inventory increasing, mortgage rates steadily falling, and inflation cooling, we might be returning to a much healthier time to buy a house. But one of these improvements we’ve seen over the past year could begin reversing, and that’s creating some interesting future scenarios. One that even we’re surprised to hear as we bring on top housing market analyst Logan Mohtashami. Logan has referred to 2022-2023’s housing market as “savagely unhealthy,” but he’s a bit more optimistic now that we’re seeing relief. While we’re still not at 2019 inventory levels (which were already low), we’re slowly getting there. However, we could see the positive inventory trend start to reverse, leading to even more affordability problems for homebuyers. So what has to happen for affordability to see meaningful improvement? Today, Logan is giving us his take on housing inventory, where mortgage rates could be heading, and why we may NOT see a spike in home prices even if rates fall significantly (something most analysts are bullish on). In This Episode We Cover Logan’s housing market, mortgage rate, and inventory forecast Why our increasing housing inventory could reverse once rates start to fall The one thing holding affordability back and whether Logan has hopes of it improving Why watching the labor market and jobs numbers will help you predict mortgage rates Were we wrong about the “lower rates = higher home prices” premise? And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find Investor-Friendly Lenders See Dave at BPCON2024 in Cancun! Dave's BiggerPockets Profile Learn More from Logan On The Market Podcast 86 - Here’s What Will Cause Mortgage Rates to Finally Fall w/Logan Mohtashami Know the Ins-and-Outs of Real Estate with “Real Estate by the Numbers" Jump to topic: 00:00 Intro 02:05 The "Baby Pivot" Stage 05:46 The Home Sales Recession 08:49 Housing Inventory Update 15:30 Rates Will Decline MORE If... 19:59 Mortgage Rate Forecast 24:48 When Will Affordability Improve? 29:05 Biggest Takeaways Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-252 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	We are at an important inflection point in the housing market, and we all want to know what's going to happen next.
0:08.0	What is the Fed going to do? Is there going to be a recession? Is inventory going to decline again?
0:14.1	And unfortunately, I just can't tell you the answers to these questions for sure.
0:18.6	But what I can do is get you as close as possible
0:22.2	to knowing by bringing on one of the most respected and accurate housing forecasters in the
0:28.0	entire business.
0:34.1	Hey, everyone, it's Dave. On this episode of On the Market, we're welcoming back an old friend, frequent guest, Logan Motishami. He's someone I have followed and listened to and looked up to for years. Logan is the lead analyst at Housing Wire and one of the most astute observers of the real estate market and the U.S.
0:54.9	economy as a whole.
0:57.0	And I'm super excited to have him on today, and especially at this period of time in the
1:02.6	housing market, because so much is changing right before our eyes.
1:07.0	So I'm eager to hear Logan's take on housing inventory and how we might be seeing some
1:12.7	reversals of the encouraging trends that had been going on for the first half of the year.
1:17.4	We're going to talk about what jobs, numbers, and bond yields tell us about the future of
1:21.8	mortgage rates and whether or not he sees more affordability on the horizon.
1:27.3	And before we jump in, I just want you to
1:28.9	know that Logan is what I would probably call an analyst's analysts. Basically, he's got a lot of
1:34.2	data and he is ready to share his knowledge freely. And that can mean that it's sometimes a lot to
1:39.9	take in, but I think it is well worth listening to because Logan is truly one of the most
1:45.2	respected analysts out there. And he, as far as I can tell, is rarely wrong. So if you want
1:50.7	to understand what may unfold in coming months, pay attention. But if you get lost at any point,
1:56.3	don't worry, I will summarize the whole conversation after my discussion with Logan to make sure you
2:01.9	understand everything that we talk about. Let's bring on Logan. Logan, welcome back to the
	...

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