Q&A with AMC Lending Group's Logan Mohtashami

Welcome to MutualFunds.com

Please help us personalize your experience and select the one that best describes you.

Your personalized experience is almost ready.

Join other Individual Investors receiving FREE personalized market updates and research. Join other Institutional Investors receiving FREE personalized market updates and research. Join other Financial Advisors receiving FREE personalized market updates and research.

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission

We hope you enjoy your experience

Channels

Fixed income news, reports, video and more.

Municipal bonds news, reports, video and more.

Practice management news, reports, video and more.

Portfolio management news, reports, video and more.

Retirement news, reports, video and more.

Learn from industry thought leaders and expert market participants.

Find the latest content and information here about the 2019 Charles Schwab Impact Conference.

Advisors

Receive email updates about fund flows, news, upcoming CE accredited webcasts from industry thought leaders and more.

Content focused on helping financial advisors build successful client relationships and grow their business.

Content geared towards helping financial advisors build better client portfolios.

Get insights on the industry trends and investment news from leading fund managers and experts.

Q&A with AMC Lending Group's Logan Mohtashami

AMC Lending Group
We recently spoke with AMC Lending Group’s Senior Loan Officer Logan Mohtashami about the current and future state of the U.S. housing market. Below, Logan makes some interesting points about the housing market and its recovery.

Insights from Logan Mohtashami

In reading much of your recent commentary regarding housing data, you have continued to take quite a skeptical stance as far as Wall Street’s constructive vantage point.

My core thesis since 2010 has been simple. We simply won’t have enough qualified home buyers in America ( X out cash buyers) because we never had the financial good in the first place. Take demand from 1996-2007 with a grain of salt on two fronts:

  • We had 2 economic cycles that had a financial bubble factor to it, creating fake demand for fake good paying jobs. We don’t have that in this economic cycle.
  • Exotic loans are all gone. This is a a very good thing as it shows that Americans simply don’t make enough money to own the debt and total cost of a home.

For a clip of Logan commenting on the housing market, click here.

Mortgage purchases as a percent of the market sales has been 20% below historical trends for years now and rates have been 5% since early 2011.

Warren Buffett was quoted recently as being surprised at how slow the real estate recovery has been. Can you point to some of the most recent data that is evident of a housing market that continues to sputter and not quite give us the affirmation of a classic bull market?

In 2000, existing home sales were 5.2 million with 8% interest rates and we had 4 million less people working in the U.S. 2014 is the year that a lot of bulls said demand would grow because supply was coming back. It didn’t happen because we lack real demand from main street.

In 2014

  • We had rising inventory
  • We had lower rates
  • We have rising rents

Still demand is going to be negative year over year.

For additional information, check out Rising Inventory & Low Rates Hasn’t Created More Housing Demand.

Are there areas of the country that stand out from a loan application standpoint?

California is a housing inflation nightmare. My own data shows that 82% of the working population is priced out of the housing market based on Median Income to Median Prices, once you exclude the Rich which to me is 3 times median income, so roughly 180K.

You have cited multi-family housing as a lone bright spot. Do you see this trend continuing?

Demographics of America are bullish for multifamily because we will have a lot of young Americans, aged 20-35, working (hopefully) for 2 decades and they will be natural renters until they rent, date, marry and then buy.

Not sure if you have a market forecast for interest rates for 2015, but where do you see mortgage rates heading?

I don’t see rates going too much higher from here. We could be in a range of 4%-5% for 2015.

The Bottom Line

Logan makes some engaging points about the current state of housing market and how it differs from previous time periods. For more insights from Logan, be sure to check out loganmohtashami.com.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of MutualFunds.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next

AMC Lending Group

Q&A with AMC Lending Group's Logan Mohtashami

We recently spoke with AMC Lending Group’s Senior Loan Officer Logan Mohtashami about the current and future state of the U.S. housing market. Below, Logan makes some interesting points about the housing market and its recovery.

Insights from Logan Mohtashami

In reading much of your recent commentary regarding housing data, you have continued to take quite a skeptical stance as far as Wall Street’s constructive vantage point.

My core thesis since 2010 has been simple. We simply won’t have enough qualified home buyers in America ( X out cash buyers) because we never had the financial good in the first place. Take demand from 1996-2007 with a grain of salt on two fronts:

  • We had 2 economic cycles that had a financial bubble factor to it, creating fake demand for fake good paying jobs. We don’t have that in this economic cycle.
  • Exotic loans are all gone. This is a a very good thing as it shows that Americans simply don’t make enough money to own the debt and total cost of a home.

For a clip of Logan commenting on the housing market, click here.

Mortgage purchases as a percent of the market sales has been 20% below historical trends for years now and rates have been 5% since early 2011.

Warren Buffett was quoted recently as being surprised at how slow the real estate recovery has been. Can you point to some of the most recent data that is evident of a housing market that continues to sputter and not quite give us the affirmation of a classic bull market?

In 2000, existing home sales were 5.2 million with 8% interest rates and we had 4 million less people working in the U.S. 2014 is the year that a lot of bulls said demand would grow because supply was coming back. It didn’t happen because we lack real demand from main street.

In 2014

  • We had rising inventory
  • We had lower rates
  • We have rising rents

Still demand is going to be negative year over year.

For additional information, check out Rising Inventory & Low Rates Hasn’t Created More Housing Demand.

Are there areas of the country that stand out from a loan application standpoint?

California is a housing inflation nightmare. My own data shows that 82% of the working population is priced out of the housing market based on Median Income to Median Prices, once you exclude the Rich which to me is 3 times median income, so roughly 180K.

You have cited multi-family housing as a lone bright spot. Do you see this trend continuing?

Demographics of America are bullish for multifamily because we will have a lot of young Americans, aged 20-35, working (hopefully) for 2 decades and they will be natural renters until they rent, date, marry and then buy.

Not sure if you have a market forecast for interest rates for 2015, but where do you see mortgage rates heading?

I don’t see rates going too much higher from here. We could be in a range of 4%-5% for 2015.

The Bottom Line

Logan makes some engaging points about the current state of housing market and how it differs from previous time periods. For more insights from Logan, be sure to check out loganmohtashami.com.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of MutualFunds.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next