Inside the Housing Market—Rates, Jobs & Opportunities

In a recent Tax Smart REI episode, economist and housing expert Logan Mohtashami dove into the major forces shaping the U.S. housing market.

From interest-rate cuts and job-market health to inventory trends and demographic shifts, he outlined why housing remains unusually resilient—even as higher mortgage rates have cooled some demand. Here are the core takeaways.

Fed Rate Cuts vs. Mortgage Rates

While many assume Federal Reserve rate cuts automatically lower mortgage rates, Logan explains that the bond market (particularly the 10-year Treasury yield) tends to move first. In 2022, the 10-year yield soared, bringing mortgage rates from around 3% to 7%, causing existing home sales to plunge.

This year, the Fed has started easing, but labor data remains strong, which lifts the 10-year yield and keeps mortgage rates elevated. According to Logan, how “sticky” mortgage rates remain depends greatly on jobs reports—weaker job data typically drags rates lower.

Why Construction & Permits Matter

A traditional early sign of recession is weakening construction. However, despite falling permits and housing starts, homebuilders rebounded once rates dipped closer to 6%. Builder confidence rose, and more single-family permits were issued.

This dynamic—new construction benefiting from slightly lower rates—ironically keeps construction workers employed, which supports economic data and can slow the drop in mortgage rates. It’s a “push-pull” scenario that underscores how interconnected these economic levers can be.

Where Home Prices Are Headed

National home prices rarely fall unless distressed inventory floods the market (as in 2008).

Today, Logan sees near-record equity, very few delinquent mortgages, and low levels of foreclosure.

That means little forced selling. Inventory remains tight—far below typical historical levels—so even with lower demand, prices haven’t collapsed. The biggest price dip came in late 2022, when interest rates skyrocketed, but since then, modest gains have reappeared.

Where rates settle for 2024 will determine if the existing home sales market can truly reignite.

Tracking Local Markets & Demographics

When deciding whether to invest or purchase, Logan emphasizes the power of local data. National averages can mislead; real estate is highly regional. Tools like Altos Research (part of HousingWire) let you dissect inventory trends, pricing, and demographic shifts by ZIP code.

Understanding where Millennials and Gen Z are forming households can signal longer-term demand. Work-from-home flexibility has also reshuffled Americans, with once “cheap” metros like Boise seeing a surge of buyers from pricier markets.

Why the 2024 Election May Not Change Much

Logan argues that economic cycles matter more to mortgage rates and home prices than whoever occupies the White House. In the event of a deeper economic slowdown, rates usually drop, and ironically, home prices can firm up again—supported by lower borrowing costs and a still-massive, equity-rich homeowner base.

Key Takeaways

• Watch the 10-Year Treasury Yield – Fed cuts help, but job data and the bond market tend to dictate mortgage rates.
• Few Distress Sellers – With record equity, the “forced selling” wave that caused 2008’s crash is nowhere in sight.
• Inventory Remains Tight – Even at historically low sales levels, lean listings keep prices buoyed.
• Local Markets Vary – Drill down on ZIP codes and demographics for accurate investor insights.
• Lower Rates Unlock Demand – Sub-6% mortgage rates likely spark existing home sales again, just as homebuilders already leverage lower effective rates for new builds.

In short, the 2024 housing story likely hinges on whether the job market weakens enough to pull rates below 6%. Until then, stable homeowners, scant distressed listings, and selective buyer demand keep a “push-pull” dynamic in play.

For investors, the lesson is clear: always know your local market fundamentals—that’s where the real opportunities (and pitfalls) lie.

Understanding the dance between mortgage spreads, labor data, and supply-demand trends equips you to make better real estate decisions—whether you’re a first-time buyer, a seasoned investor, or simply curious about what’s next for America’s housing market

Get started on optimizing your portfolio with a tax strategist. Reach out today.

Transcript

0:00 – 0:33 | Introduction

Thomas Castelli, CPA (00:00.59)
All right—welcome to this week’s episode of the TaxSmart REI podcast. Today we’re joined by Logan Mohtashami, and we’re going to be talking about interest rates, inflation, the 2024 election, supply and demand, and a whole bunch of other factors that might impact mortgage rates and your real estate investments at large.

We’ll be diving into all that in just one minute, so stay tuned.

[Brief Musical Interlude / Sponsor Break]

Thomas Castelli, CPA
All right, and we’re back. Logan, thank you so much for taking the time to join us today. Would you be able to give our listeners a little background on yourself and how you got to where you are now?

0:34 – 1:23 | Logan’s Background

Logan Mohtashami (00:33.771)
It kind of happened by accident. My family’s been in banking since the late 1950s, and I was a loan officer for 17 years, starting in 2003. In 2010, someone at Benzinga asked me to write about economics.

One thing led to another, and by 2015 I decided there was too much bad info online; I wanted to offer a more sophisticated data-analytical view on the economy and housing.

My work became popular, especially during COVID and onward. Now I’m here, talking with you, touring the country, bringing thousands of my charts, explaining housing economics and how the economic cycle works.

1:24 – 3:40 | The Fed’s Rate Cuts & Mortgage Rates

Thomas Castelli, CPA (01:23.566)
That’s a big undertaking, for sure. I’ve followed a lot of your work on HousingWire, and it’s very comprehensive. Let’s jump right in. Recently, the Fed finally started cutting interest rates by about 50 basis points. How do you see that affecting mortgage rates, both short and long-term?

Logan Mohtashami (01:49.537)
I always say mortgage rates move with the 10-year yield, and the bond market usually anticipates what the Fed does. We got almost a 2% move lower in mortgage rates with no cuts before, but we hit a key technical level in the bond market. I don’t believe we break under that again unless the labor market really deteriorates.

What’s interesting is that right when the Fed cut rates, a lot of economic data improved—housing starts beat estimates, retail sales beat, industrial production was up, and so on.

Then the jobs report came out, three of the four labor data points beat estimates, so the 10-year yield jumped, pushing mortgage rates higher. We’ve had this back-and-forth dynamic since 2022. We see some progress on rates, then they go back up, and so on.

3:41 – 5:15 | Jobs Data vs. Fed Moves

Thomas Castelli, CPA (03:40.206)
So it sounds like even though the Fed does cut rates, it’s not the sole driver of mortgage rates. There’s also the jobs data, correct?

Logan Mohtashami (03:51.093)
Exactly. Jobs data is huge. If the labor market weakens, that tends to push rates down. But if it stays strong, rates don’t necessarily follow inflation down. The Fed’s still pretty restrictive. Last year we saw inflation slow faster than expected, but rates stayed high because the labor data was strong. Right now, every major “jobs week” moves the 10-year yield, which moves mortgage rates.

5:16 – 6:20 | Outlook for Additional Rate Cuts

Ryan Carriere, CPA (05:16.507)
What’s your expectation for the rest of the year or the next six months? Are we looking at more rate cuts?

Logan Mohtashami (06:00.865)
Yes, we should see about a quarter-point cut in the next two Fed meetings, plus a few cuts next year. The market’s already priced that in. If labor weakens more, the 10-year yield falls further, and mortgage rates could dip below 6%. That’d be a game-changer for existing home sales.

The new home sector’s already been doing okay because builders can buy down rates closer to 6% or below.

6:21 – 8:06 | The Role of Construction & Permits

Logan Mohtashami
Interestingly, construction normally slows first in a cycle; those workers lose their jobs pre-recession. This time, it almost happened earlier this year—housing starts and permits fell, Home Depot/Lowe’s warned, etc.

Then rates dipped, new home sales picked up, and permits improved again. That’s keeping construction workers employed longer, which ironically means the economy stays stronger, so rates don’t fall as much. It’s a back-and-forth dance.

8:07 – 9:59 | Mortgage Rate Spreads Explained

Ryan Carriere, CPA (08:07.864)
You’ve mentioned the word “spread” a few times. Could you clarify what that means in terms of mortgage rates?

Logan Mohtashami (09:00.865)
Sure. Mortgage spreads refer to the difference between the 10-year Treasury yield and the 30-year mortgage rate. Typically it’s around 1.6% to 2.0%.

In 2022 it widened dramatically—almost to 3%—raising mortgage rates more than usual. Lately, it’s improved somewhat. If it normalizes fully, we could drop another 0.5% to 0.75% on mortgage rates. That alone could get us under 6% if the 10-year doesn’t move much.

10:00 – 12:25 | Impact on Housing Prices

Thomas Castelli, CPA (10:00.59)
So if mortgage rates go down, is that going to lower prices, stabilize them, or maybe push them even higher?

Logan Mohtashami (10:33.771)
Historically, home prices rarely fall—the big exception was 2007-2011. Typically, in recessions, prices still hold up or even rise. You need a lot of distressed sellers to drive prices down. Right now, foreclosure activity is at historic lows, and there’s a lot of equity. Inventory’s still relatively tight, so we’re seeing small price increases in 2023-2024, even with low sales levels.

The only real decline was the latter half of 2022, when rates went from 3% to 7% super fast. Otherwise, supply-and-demand equilibrium is keeping prices firm.

12:26 – 15:00 | Could Distress Sales Rise?

Thomas Castelli, CPA (12:26.21)
Is there anything on the horizon—like a recession—that could bring more distressed sellers?

Logan Mohtashami (12:51.553)
We don’t see it. Usually, you need big job losses plus exotic mortgage debt to get forced selling. Our credit market changed after 2011; qualified mortgages are stronger, and almost 40% of homes don’t have a mortgage at all. Plus, negative equity is almost nonexistent.

People don’t typically foreclose on a house they have 50% equity in. The housing crash in 2008 was unique—over 23% of homes were underwater then; now it’s around 1.7%. Barring something extreme, we won’t see a wave of forced selling.

15:01 – 17:35 | Housing Market Strength & Long-Term Trends

Ryan Carriere, CPA
It sounds like the market is pretty healthy. Any downside to the consistent price growth over decades?

Logan Mohtashami
Affordability is definitely a concern. In 2021, I was already calling the market “savagely unhealthy” because prices ran too fast. That hurts demand once rates rise. But historically, outside of 2007-2011, nominal home prices just don’t fall much.

17:36 – 19:59 | Investing in Housing Today

Thomas Castelli, CPA (17:36.206)
So is it a good time for investors to jump in?

Logan Mohtashami (17:46.613)
It depends on knowing your area. Savvy investors who understand local conditions and can find deals in cheaper spots might do well. But if you just rely on national figures without local nuance, that’s risky. The broader picture is positive: strong demographics, lots of equity, and stable supply-demand. But local markets vary a lot.

20:00 – 22:30 | Where to Find Market Data

Ryan Carriere, CPA (20:00.76)
Where can people find the kind of data you mentioned, like the local inventory or forward-looking stats?

Logan Mohtashami (20:34.721)
Check out HousingWire.com. We post weekly tracker data for active listings, new listings, price cuts, mortgage rates, etc. Altos Research is also part of HousingWire; they provide deep dives into specific zip codes—60+ data lines per location. You can do a demo there. We also have a top-10 podcast called HousingWire Daily (Spotify, Apple, YouTube) where I go in detail. And if you really want daily charts, my Instagram under my name is chart overload.

22:31 – 24:00 | The Demographic Factor

Thomas Castelli, CPA
You mentioned demographics. So from an investor standpoint, look at markets where younger buyers (Millennials, Gen Z) are moving in, correct?

Logan Mohtashami (22:40.625)
Yes, especially as they form households. The “rent-date-mate” cycle leads many to single-family homes. Baby Boomers are aging out, so you want to see which areas have robust younger populations who can buy, or even mid-career professionals relocating.

Also watch for potential climate change or insurance cost concerns in some regions. It’s a lot of local nuance.

24:01 – 28:11 | Migration & Regional Differences

Ryan Carriere, CPA
Any notable migration trends? We’ve heard about the Sun Belt or big cities…

Logan Mohtashami
Work-from-home changed a lot. People with big-city incomes moved to cheaper locales like Boise, pushing prices up 50%-60%. The Midwest and parts of the Northeast might see growth if they’re safer from climate risk. Also, watch where Californians or New Yorkers relocate—these folks often see local prices as bargains, which can inflate those markets.

28:12 – 30:00 | 2024 Election Impact?

Thomas Castelli, CPA
What about the 2024 election? Any big effect on the housing market?

Logan Mohtashami (28:30.625)
Historically, economics and the labor cycle matter more than which party is in power. If the labor market weakens significantly, rates fall and housing stabilizes or even grows. Presidents don’t control rates or the workforce directly. So I’d keep an eye on the economy rather than the election for housing signals.

30:01 – 34:00 | Summarizing the Market

Thomas Castelli, CPA
So, in summary, if rates drop (likely due to softer jobs data), demand rises, and that tends to support or lift prices, right?

Logan Mohtashami (30:14.318)
Yes, that’s it in a nutshell. Lower rates = more demand, which typically boosts home sales. The new home market has shown us that sub-6% rates stimulate buyer activity. But each local market is unique, so the best approach is to track the early indicators like new listings. My data points to no big wave of distressed sellers, so we don’t see a national price crash on the horizon.

34:01 – 36:00 | Where the Market Could Break

Thomas Castelli, CPA
If we do eventually see a break, what would it look like?

Logan Mohtashami
We’d see it in our new listings data first—like 2009-2011, where we had 250,000 to 400,000 new listings per week. Currently, we’re at record lows of 30,000 to 90,000 new listings. Until that changes dramatically, supply-demand remains fairly balanced, meaning no large-scale price drops.

36:01 – 48:48 | Final Thoughts & Where to Find Logan

Thomas Castelli, CPA
Got it. And you mentioned HousingWire.com and your Instagram for daily charts. Any other resources?

Logan Mohtashami (36:05.877)
That’s the main place. At HousingWire, you’ll find the weekly tracker, Altos Research for zip-level data, and the HousingWire Daily Podcast. My Instagram under my name has daily chart stories on economics overall, not just housing. I try to make it understandable because typical academic economics can be stale, and I think it’s important for people to grasp how these cycles truly work.

Thomas Castelli, CPA (48:36.662)
Great. Well, thanks so much for coming on the show, Logan. This has been really insightful. It’s good to hear the market is stable, and we appreciate all your knowledge.

Logan Mohtashami (48:47.841)
Thank you for having me.

Ryan Carriere, CPA (48:48.76)
Thanks, Logan!

Thanks for tuning in, and we’ll see you on the next episode of the TaxSmart REI Podcast!

If you’re interested in reducing taxes through real estate investing, feel free to contact us for more information or consultation.

Disclaimer: This podcast summary and transcript were partly generated by AI and may contain some errors or miss key points from the audio recording.