Logan Mohtashami on the chaos theory applied to housing in 2020
Today’s Daily Download episode features an exclusive interview with HousingWire CEO Clayton Collins and Lead Analyst Logan Mohtashami. In the interview, which was conducted at HousingWire’s Annual Conference, Mohtashami delves into the chaos theory applied to housing in 2020.
For some background on the interview, here’s a summary of Mohtashami’s recent article:
Today, purchase application data confirmed what I needed to see to justify that we should get a positive total existing-home sales year in 2020. Yes, as crazy as it sounds, we can do this for the existing home sales market in 2020.
I wanted to see at least 20 straight weeks of double-digit year-over-year growth on average to make up for the nine negative weeks we saw due to COVID-19. Those nine negative weeks came at a crucial time for the MBA purchase application data as it was right in the data line’s heat months. So, we had a lot of work to do to get back to the point where we can go positive, but it happened.
The MBA report shows the year-over-year growth for the last eight weeks has been +21%, +22%,+25%,+6%, +40%,+28% +33% and +27%. As you can see in the chart, these last eight weeks have created enough demand to move the total volumes higher than we would see during the heat months, which is during the second week of January to the first week of May. Since this data looks out 30-90 days, it’s enough demand to help the existing home sales market, which is still a negative year to date, to be positive for the year. The only thing that can stop this is some non-economic events at this stage since we are in October.
In the interview, the pair also discuss how the housing market has rebounded during the COVID-19 pandemic. As well as the nation’s lack of housing inventory, a concept Mohtashami has been vocally against.
“If there was this record-breaking demand and no homes to buy, real home prices on a year-over-year basis would be skyrocketing,” Mohtashami said. “There is homes to buy when people are ready to buy.”
The Daily Download examines the most compelling articles reported from the HousingWire newsroom every day. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. This podcast is hosted by the HW team and produced by Alcynna Lloyd and Victoria Wickham.
HousingWire articles covered in this episode: