In a recent interview on “Cavuto: Coast to Coast,” Barbara Corcoran, the founder of The Corcoran Group and a prominent “Shark Tank” investor, shared her insights on the potential trajectory of the housing market.
Corcoran believes that if interest rates decrease by just one percentage point, housing prices will soar. “Prices are going to go through the roof,” she stated, anticipating a surge of buyers entering the market to take advantage of the lower rates.
As of March 27, the interest rates for 30-year and 15-year fixed-rate mortgages remained unchanged at 7% and 6.125%, respectively.
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The Federal Reserve has kept interest rates steady for the fifth consecutive time, maintaining the federal funds rate between 5.25% and 5.5%, a 22-year high.
This decision, while widely anticipated, will keep rates for mortgages, loans, and credit cards elevated.
.@BarbaraCorcoran to Neil on @FoxBusiness: If rates go down just one percentage point, prices will go through the roof. pic.twitter.com/RCPZQWC0WT
— Neil Cavuto (@TeamCavuto) March 27, 2024
Corcoran advised against waiting for interest rates to drop further, cautioning that the potential savings could be outweighed by the expected increase in real estate prices. “If you wait for interest rates to come down by another point, I don’t think you’ll gain. I think you’ll wind up paying more,” she warned, suggesting that real estate prices could rise by 8-10% if interest rates decrease.
The real estate mogul also addressed recent speculation that the cost of selling homes might decrease this year, clarifying that this does not necessarily translate to lower housing prices.
Corcoran explained that sellers are unlikely to pass on any savings from reduced commissions to buyers, as they typically aim to maximize their profits. “Sellers aren’t made that way. When the seller lists a home, they want the most money they can get, so they’re going to take any savings and put it in their pocket,” she said.
Despite various economic uncertainties, Corcoran identified the shortage of available houses as the primary factor driving the real estate market upward. “You can’t erase a shortage of houses, and it’s going to push that market forward,” she emphasized.
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While uncertainty can slow down the market, the persistent lack of supply is expected to continue pushing prices higher.
