America’s real estate market is flipping between hot and cold, and the Corcoran Group matriarch is pointing out one factor that could keep buyers and sellers warm through 2025.
“The buyers themselves have gotten accustomed to the rates being what they are, and they just got tired of waiting. But I am wondering if we’ll ever see a 5% number because anything with the 5% in front of it is going to make this market go ballistic,” Barbara Corcoran said Thursday on “Cavuto: Coast to Coast.”
“Rates have been bouncing around a while now, 6% to 7%. So people are confused,” she continued. “They don’t have big expectations. They’re no longer waiting for a tremendous rate drop. If that happens, God, it would be incredible for the market.”
The 30-year fixed mortgage rate climbed closer to 7% this week, as Freddie Mac’s latest Primary Mortgage Market Survey showed that the average benchmark rate rose to 6.84% from last week’s reading of 6.78%.
BOZEMAN, MONTANA HOME TO A BOOMING REAL ESTATE MARKET
Meanwhile, the National Association of Realtors on Thursday reported that existing home sales jumped 3.4% in October from the month before to 3.96 million, lifting off a 14-year low in September.
But Corcoran worries about the current demographic of homebuyers, claiming more first-time owners are needed in the market.
“What is more disturbing to me is, the number of first-time buyers are now at 24%, the lowest in history. And the number of old cash buyers is at the highest in history, it’s at 27%,” she pointed out.
“I think what we’re losing right now, and we desperately need, is more first-time buyers,” Corcoran added. “In the last month alone, we have sold 3.5% more houses despite what’s going on in the interest rates. But the first-time buyers aren’t much a piece of that.”
If rates are to go higher, the Corcoran Group CEO warned it could hinder many sectors of the U.S. economy.
“The whole market would slow down. The whole economy would slow down, all the support services for the housing market. It would be a terrible thing,” she said. “But I don’t think people are thinking it’s going to go [that] much up, if you really listen to the experts.”
However, there are some local housing markets keeping the heat across the South and Midwest.
“The South hasn’t done as well as the Midwest. The Midwest prices have gone up 7% compared to one year ago,” Corcoran noted. “I think it’s a vital market. It’s got a lot more steam in it. And again, I just say I’m just waiting for that 5% number. Anything with a 5% and you’re going to be moving, and I’m going to be selling your house.”
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FOX Business’ Breck Dumas contributed to this report.
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