Real estate expert and “Shark Tank” star Barbara Corcoran believes there’s one magic number that could send the housing market into overdrive: 5% mortgage rates.
During a recent chat on Fox Business’s “Cavuto: Coast to Coast,” Corcoran explained that if mortgage rates drop into the 5% range, it would spark incredible homebuying activity.
Right now, rates are hovering at 6.6%, which is still a big improvement from their recent highs of over 7%.
Why 5% Rates Could Change Everything
Corcoran says buyers have gotten used to current rates and stopped waiting for a big drop. But if rates dip to 5%, it could completely change the game.
“Anything with a 5% in front of it would make the market go ballistic,” she said. “Buyers would come out in droves, and it would be a huge boost for housing.”
First-Time Buyers Are Needed
Corcoran also pointed out a big problem: there aren’t enough first-time buyers entering the market.
Right now, only 24% of homebuyers are first-timers, which is an all-time low.
“We desperately need more first-time buyers,” Corcoran said. “They’re the foundation of the housing market.”
Existing-Home Sales Are Rising
There is some good news—sales of existing homes went up by 3.4% last month.
That’s the first year-over-year increase in almost three years. However, most of these sales didn’t include first-time buyers.
What Does the Future Hold?
While Corcoran is hopeful rates might hover around 6% or even drop lower, she doesn’t expect them to go above 7% again anytime soon.
Economists agree that if mortgage rates fall gradually, the housing market will steadily grow.
But if rates drop sharply to 5%, it could cause a sudden rush of buyers and sellers.
For now, buyers are adjusting to the current rates and making moves—but everyone’s keeping an eye on the numbers.
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Could a 5% mortgage rate be the spark that lights the housing market on fire? Only time will tell!