One of America’s most prominent figures of commerce, finance and real estate has unveiled exactly when the housing market may see its next drastic shift.
“I can’t explain the rates going up or down – that’s not my bailiwick. But what I can explain is if rates go down, just another percentage point, that’s what I’m hoping for, prices are going to go through the roof,” The Corcoran Group founder and “Shark Tank” investor Barbara Corcoran said in a wide-ranging interview on “Cavuto: Coast to Coast” Wednesday.
“Everyone will come out and buy. There are probably 10 buyers on the sidelines waiting for interest rates to come down that are actually active in the market,” she continued. “So everybody’s going to charge the market.”
As of March 27, the interest rate on a 30-year fixed-rate mortgage sat at 7% while the 15-year fixed-rate mortgage was 6.125%, both unchanged from the previous day.
The Federal Reserve left interest rates unchanged for the fifth straight time in its latest meeting, while clarifying that plans to cut rates may be pushed out further, but remained committed to three this year.
The decision, which was widely expected, keeps the federal funds rate between a range of 5.25% to 5.5%, a 22-year-high. This will also keep rates for mortgages, loans and credit cards at elevated levels.
“If you wait for interest rates to come down by another point, I don’t think you’ll gain. I think you’ll wind up paying more,” Corcoran cautioned, “because I wouldn’t be surprised if real estate went up by another 8 or 10% if interest rates come down.”
“There’s a magic number that makes people get all juicy about. And it just has to slide down there for everybody to say: let’s get out there and take advantage of it,” she added.
Corcoran also expanded on recent commentary where she argued that the cost of selling homes could go down this year, but it doesn’t mean housing price tags will go lower.
“A lot of people are predicting house prices will come down because the seller will pay less of a commission and take that difference and give it to the buyer. Sellers aren’t made that way. When the seller lists a home, they want the most money they can get, so they’re going to take any savings and put it in their pocket,” she told FOX Business’ Neil Cavuto.
“The cost of housing, I believe, will go up because it has been going up. It’s been going up for the last five years, despite the dire state of the shortage of houses,” Corcoran said. “So house prices have gone up 6% this year alone. But the real deal is, [there] is not enough houses to go around.”
Amid other macroeconomic uncertainties, the one factor that would push real estate on an upward trajectory is more supply, according to the industry leader.
“Whenever there’s uncertainty, people stall. And whenever people stall, it stalls the marketplace. So any kind of uncertainty slows down the market,” Corcoran noted. “But despite that, and overriding all of that, is a shortage of houses. You can’t erase a shortage of houses, and it’s going to push that market forward.”
FOX Business’ Suzanne O’Halloran contributed to this report.
