Barbara Corcoran: What Mortgage Rate Could Make the Market Explode?

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As you set your sights on homeownership in the coming year, especially if you’re a first-time buyer, you’re likely keeping a close eye on the housing market. It feels like you’re perched on the edge, waiting for that perfect four-bedroom gem in a top school district to pop up so you can make your move. It’s a game of strategy and timing where every moment counts!

And guess what? Barbara Corcoran—yes, the powerhouse author, financial guru, and star of “Shark Tank”—is in tune with your hustle. In a recent chat on “Cavuto: Coast to Coast,” she asserted that if mortgage rates dip to 5%, the housing market will “go ballistic!”

But what does “ballistic” mean for the housing market? Is it good news for buyers, sellers, or everyone in between? Let’s dive in.

Lower Rates Could Ignite a Buying Frenzy!

Even though mortgage rates are hovering around 6.8%—not quite the rock-bottom rates of yesteryear—Barbara believes that buyers are ready to take the plunge. “These buyers are tired of waiting. They’re eager for change, and if we see a dip to 5%, the market will absolutely explode!”

If rates remain steady in the 6% to 7% range, consumers might not hold out hope for a significant drop. But if they do see 5%, it could be a game-changer, leading to a surge of eager buyers flooding the market!

The Critical Need for First-Time Buyers

One major concern for Barbara is the dwindling number of first-time homebuyers. According to her insights, they now only account for 24% of the market—an all-time low! Meanwhile, all-cash buyers continue to rise, making it tougher for those who rely on loans. All-cash offers are often more appealing to sellers since they can close quickly and without complications.

In fact, a report from the National Association of Realtors confirms that first-time buyers are facing uphill battles due to soaring prices, limited inventory, and high mortgage rates. They’re struggling just to get their foot in the door!

The Housing Market’s Influence on the Economy

But why does a dip to 5% matter? Well, the ripple effect on the economy is substantial. A buying frenzy not only energizes the housing market but could also lead to a flourishing economy. When people are excited about buying homes, it creates jobs and supports various industries related to real estate.

By the same token, if rates continue to climb, we might face a slow-down that could negatively impact our broader economic landscape.

Fortunately, Barbara shared some hope: experts don’t foresee a major rate hike anytime soon. So, keep your eyes peeled and your dreams alive because the housing market might just be gearing up for an exciting ride!