Barbara Corcoran told “Good Morning America” viewers on Wednesday that she doesn’t foresee prices dropping any time soon but could see them spiking once mortgage rates come down.
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In a market wrought with uncertainty, there’s one thing Barbara Corcoran is certain about: Housing prices are not going to fall any time soon.
On Good Morning America Wednesday, the Shark Tank star and founder of The Corcoran Group took questions from viewers about the state of the housing market. The first question of the segment was about housing affordability, specifically whether Corcoran foresaw housing prices decreasing in the near future.
“There’s not a lot out there,” Corcoran said. “But I can tell you this, house prices are not going to come down.”
With mortgage rates sitting at 7 percent, Corcoran described the current housing market as “surprisingly strong” with few houses sitting on the market for long. The Federal Reserve has been gradually raising rates in its fight against inflation — which has dropped from an annual rate of 9 percent to roughly 3 percent over the past year.
The minute mortgage rates begin to fall significantly, Corcoran predicted a feeding frenzy.
Buyers who have been priced out will jump back in the market, driving up demand considerably “and houses are going to go up in price all over again,” she said. “I wouldn’t be surprised if they go up by as much as 10 percent or 15 percent when that happens.”
Home price growth is expected to drop for 2023, with annual home price growth climbing only 1.6 percent between May 2022 and May 2023, the first increase in the rate of growth recorded in 13 months, according to the CoreLogic Home Price Index.
Selma Hepp, chief economist for CoreLogic said in the report, “While the continued imbalance between buyers and sellers continues to pressure home prices, June’s annual bump in price growth echoes economic resiliency, a thriving U.S. job market and strong consumer spending. And while higher mortgage rates are impacting affordability for buyers with loans, almost 4 in 10 sales are all-cash transactions. Also, most baby-boomer homeowners have substantial equity, which could be putting pressure on prices in markets where that generation is currently migrating.”
Corcoran’s advice to prospective homebuyers is to “adjust their expectations” — which she acknowledged could be a difficult ask when their neighbor bought their house at a lower price and a lower mortgage rate. She also advised homebuyers to shop around for mortgage rates that suited them or to consider an adjustable-rate mortgage.
To would-be homesellers, she acknowledged that they have it easier but recommended holding off for now if they can.
“You really don’t need any help,” Corcoran said. “Everything is selling today…But if it was my house, I would wait until next year when all the buyers come off the sidelines when interest rates come [down].
“I’m going to get a lot more for my house than I would get right now. So they have no problems. Nobody’s feeling bad for the sellers.”