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Corcoran Group founder Barbara Corcoran on Thursday warned homebuyers and sellers they’re not out of the woods just yet when it comes to the challenges of today’s market.
During a recent appearance on Mornings with Maria on Fox Business, the “Shark Tank” entrepreneur was asked by host Maria Bartiromo how stagnant mortgage rates are impacting the industry.
Market Challenges and Impact on Buyers and Sellers
Mortgage rates have inched downward, with the 30-year fixed rate falling down “by a fraction of a point to 6.96 percent,” Corcoran said, representing the lowest rate in six weeks. The 15-fixed loan rate was 6.21 percent as of Thursday. However, Corcoran believes the minimal drop is not enough to spur major market challenges.
Corcoran says that rates are influencing the market in two ways — financially and psychologically.
“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,” she said. “It went from 7 [percent] to 6.9. Psychologically, that makes a difference, but with interest rates remaining high, what it really causes is fewer houses on the market.”
Homes Aren’t Selling
Despite Corcoran’s belief that fewer houses will be available, a recent Redfin analysis revealed an uptick in new listings. However, these homes are not selling quickly, with many sitting on the market for at least 55 days.
Sellers Remain Hesitant
With the spring homebuying season approaching, Bartiromo asked whether homebuyers might start getting “realistic” about their pricing.
Corcoran was blunt in her response.
“No, I don’t think it’s in the nature of sellers to be realistic, honestly. Their house is always worth more,” Corcoran explained.
She also doesn’t expect home prices to drop anytime soon, which is yet another factor keeping sellers on the sidelines. Redfin data shows that pending sales have risen to 65,603 as of January.
“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.”
