Logan Mohtashami on existing home sales, mortgage rates

Today’s HousingWire Daily begins the Rundown miniseries, hosted by HousingWire’s Editor-in-Chief Sarah Wheeler and Lead Analyst Logan Mohtashami. In this episode, Mohtashami discusses his latest HW+ article, which examines the National Association of Realtors’ existing home sales report showing another beat of estimates.

According to Mohtashami, existing home sales growth is above his trend sales peak of 6.2 million, meaning existing home sales are now outperforming as demographics remain strong in 2021.

The discussion also includes his insight on changes in macro economic factors over the last week and how they impact housing. Mohtashami examines inflation, inventory, and shares his predictions on how mortgage rates will behave in 2022.

Here is a small preview of the interview, which has been lightly edited for length and clarity:

Sarah Wheeler: Today, I really wanted to talk about the existing home sales data we received this morning from NAR. You wrote your most recent article on the topic and it is now live on our site. So, let’s dive into data, which looks like a beat at 6.3 million. This is above the level you often talk about. So, what does this data mean to you?

Logan Mohtashami: Last year, I had to tell people that housing data was going to moderate because we had a surge in sales data in the second half of 2020, which is not normal. As we couldn’t sustain those levels, I told everyone to expect moderation. However, people typically go straight to the crash mode when they see home trends fall. This is because I don’t think a lot of people have training on doing adjustments that are caused by a global pandemic. So, I’ve talked about sales ranges between 5.4 million to 6.2 million for this year, and if we stay in those levels that will be really good. I think we got up to almost 6.7 million at one point last year, which is not a true sales trend range. After this time, home sales started to fall and everybody began to say, “Oh, housing is crashing, and home sales are getting weaker,” and there was actually no front-loaded data for that to be the case. It is just the moderation that would typically happen following a surge in data. So, what happened is existing home sales only got below 5.84 million one time. I had anticipated that to happen a few times, and then it just found a base and it moved up higher. We see this with all housing data, including purchase application data, which has been getting better for the last 11 weeks and nobody has cared to notice. Furthermore, homebuilder confidence found a base and then just worked off from it. So, anything above 6.2 million is a beat in my mind. After that moderation, we’ve now had back-to-back prints over that level, which means existing home sales is outperforming currently, and that’s primarily driven by mortgage buyers.

HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by Jordan White and produced by Alcynna Lloyd and Elissa Branch.

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