One of the most prominent figures in American commerce, finance and real estate has revealed exactly when the housing market will undergo its next dramatic change.
“I can’t explain whether interest rates will go up or down. That’s not my preference. But what I can explain is that if interest rates go down another percentage point, that’s what I want, and prices will go down. It’s going to go through the roof,” said Barbara Corcoran, founder of The Corcoran Group and “Shark Tank” investor, broadly. Extensive interview with ~Kabuto: From coast to coast” Wednesday.
“Everyone’s going to buy. For every buyer who’s actually active in the market, there’s probably about 10 people who are sitting on the sidelines waiting for interest rates to go down,” she continued. “So everyone is going to charge the market.”
As of March 27, the 30-year fixed-rate mortgage rate was 7%, and the 15-year fixed-rate mortgage rate was 6.125%, both unchanged from the previous day.
The Fed kept interest rates on hold for the fifth straight time in its recent meeting and made it clear that its plan to cut rates could be delayed further, though it remains committed to three cuts this year.
The widely anticipated decision would keep the federal funds rate in the 5.25-5.5% range, its highest level in 22 years. This will also keep interest rates on mortgages, loans, and credit cards at high levels.
“I don’t think you’ll benefit by waiting for interest rates to fall further. “I think you’ll end up paying more,” Corcoran warned. “Because if interest rates come down, I wouldn’t be surprised if real estate goes up another 8 or 10 percent.”
“There’s a magic number that gets people hooked. And it has to slide there and everyone can say, ‘Let’s go out there and take advantage of it,'” she said. added.
Mr. Corcoran also expanded on recent comments in which he argued that while the cost of selling a home may come down this year, that doesn’t mean home prices will go down.
“Many expect home prices to go down because sellers pay fewer commissions and pass the difference on to buyers. Sellers aren’t built that way. I’m going to take all my savings and put it in my pocket because I want to have a lot of money,” she told FOX Business’ Neil Kabuto.
“Housing costs have gone up and I think they’ll continue to go up. Despite the dire situation of housing shortages, they’ve been trending upward for the past five years,” Corcoran said. “So home prices have gone up 6% this year alone. But the truth is, [there] There aren’t enough houses to go around. ”
Industry leaders say increased supply is the only factor keeping real estate prices on an upward trajectory amid other macroeconomic uncertainties.
“Whenever there is uncertainty, people stall. And whenever people stall, the market stalls. So any kind of uncertainty slows the market down,” Corcoran said. he said. “But in spite of all that, and on top of it all, is the housing shortage. You can’t eliminate the housing shortage, but the housing shortage is going to drive the market forward.”
FOX Business’ Suzanne O’Halloran contributed to this report.
