Sep 18, 2026 · 20 min
Builders manage supply as housing’s cycle loses momentum
Is the housing construction cycle breaking?
The episode tests whether weaker construction signals a broader housing downturn or a controlled builder response to rates and demand.
- 1Construction has weakened through permits and starts, but data-center building may be offsetting some broader economic effects.
- 2Builders are staging completed, contracted, and uncontracted homes while using mortgage-rate incentives to protect sales.
- 3New-home and existing-home data describe different markets, making supply comparisons especially easy to misread.
Don't miss
Logan Mohtashami explains why weaker residential construction has not produced the traditional recessionary chain reaction, with data-center building providing an offset.
The brief
Sarah Wheeler and HousingWire analyst Logan Mohtashami examine whether weaker permits and starts mark a broken construction cycle or a managed slowdown shaped by mortgage rates.
The discussion connects Treasury yields, oil prices, the Fed, and Middle East conflict to mortgage-rate movements, while asking how broader economic conditions could affect housing demand.
Mohtashami argues residential construction has weakened without producing the usual recessionary chain reaction, partly because data-center construction is providing an offset.
The episode’s key distinction is between new and existing homes: builders manage completed and contracted inventory differently from the supply conditions facing existing-home sellers.
Mohtashami explains why builders use sub-6% financing incentives and completed-home supply as signals for whether to maintain production or pull back.
The closing discussion turns to labor data, Kevin Warsh, and the conditions that would justify abandoning a rate-hiking bias.