Sunny skies aren’t shining across America’s real estate market just yet, according to one of the nation’s top experts and “Shark Tank” entrepreneurs.
“No one wants to move and [there are] fewer houses to choose from at higher rates. So it’s difficult for homebuyers,” Corcoran Group founder Barbara Corcoran said on “Mornings with Maria,” Thursday.
Mortgage rates are moving down “by a fraction of a point,” Corcoran pointed out while reacting to 30-year fixed rates falling to 6.96% – the lowest level in six weeks. As of Thursday, the 15-year fixed loan rate was at 6.21%.
However, in Corcoran’s view, rates aren’t low enough for sellers to list their homes. Redfin reported in December that more than half (54.5%) of homes on the market had been listed for more than 60 days, with many deemed too expensive by would-be buyers.
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“Mentally, it affects the housing market because people are waiting for very good news and coming down a tenth of a point is not really good news. It went from 7 [percent] to 6.9,” she explained. “Psychologically, that makes a difference, but with interest rates remaining high, what it really causes is fewer houses on the market.”
What’s more, the real estate expert doesn’t believe home prices will come down anytime soon.
“I don’t think it’s in the nature of sellers to be realistic, honestly. Their house is always worth more,” Corcoran argued.
“I don’t think prices will shake out at all. I think they’ll hold out hoping interest rates will go down again. And what is it to them?” she continued. “It’s another six months. And a lot of the sellers have very low interest rates they don’t want to give up.”
This current stagnant market was preceded by a flurry of activity driven by high demand during the pandemic, but has significantly slowed as soaring home prices and mortgage rates have led to an ongoing affordability crisis that has pushed homeownership out of reach for many Americans.
Some pockets of optimism can be found in the luxury housing market, as Corcoran noted those deals are getting done at double the rate of the national average.
“I really like the luxury market. I hate to say, I’m very bullish on that, particularly in warm climates. All the rates… are going up almost double the national average. And that’s a pretty good report card.”
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FOX Business’ Breck Dumas contributed to this report.
