Kat Koutsantonis Chief People Officer | realtors.com
Real estate expert Barbara Corcoran has shared her perspective on the potential impact of mortgage rate changes on the housing market. Speaking on Fox Business' "Cavuto: Coast to Coast," Corcoran suggested that a drop in mortgage rates to within the 5% range could lead to significant homebuying activity. Currently, mortgage rates have decreased slightly to 6.6%, marking the fifth consecutive week of decline.
Corcoran noted that while rates have fluctuated between 6% and 7%, she is uncertain if they will ever reach 5%. She emphasized that such a decrease would be beneficial for the market, stating, "Rates have been bouncing around for a while now … so people are confused, they don’t have big expectations, they’re no longer waiting for a tremendous rate drop. But if that happens, God, it would be incredible for the market."
The real estate mogul also highlighted a pressing need for more first-time buyers in the market. She pointed out that less than 24% of current buyers are purchasing their first homes—a record low.
In contrast to this trend, existing-home sales have increased by 3.4% over the past month, marking the first year-over-year gain in nearly three years. However, Corcoran mentioned that first-time buyers were not significantly involved in these sales.
Realtor.com Chief Economist Danielle Hale concurred with Corcoran's assessment regarding lower mortgage rates potentially invigorating the market. Hale stated, "Every drop in mortgage rates is going to make a difference for some home shoppers who are on the margin." While she does not foresee a drastic reduction in rates soon, she acknowledged that any sharp decline could stimulate both buyer and seller activity.
Hale warned that an increase in mortgage rates could slow down various aspects of the economy and housing market support services. However, Corcoran expressed optimism about future rate trends: "I don’t think people are thinking it’s going to go much up," she said.
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