BI
- Don't wait for a better deal in the housing market, Shark Tank's Barbara Corcoran says.
- As rents and mortgage rates drop, prospective buyers may be tempted to see how low they go.
- "The minute actual interest rates come down just one more point, everybody's going to jump into the market."
As mortgage rates and rent prices drop, prospective buyers may be tempted to wait out the fall before diving into the market.
That's a fool's errand, "Shark Tank" investor and real-estate legend Barbara Corcoran says.
"You're much better off buying something now when you can," Corcoran said in a CNBC interview on Wednesday. "Because if you don't have a chit in the game, and you continue to be a tenant and wait the market out — which many people are thinking right now they should be doing — they're dead wrong."
Redfin noted recently that median asking rents saw their biggest year-over-year drop since February 2020. Corcoran said rent prices had probably hit a short-term peak as inventory concerns eased, but it was a minor decline at best.
Mortgage rates, too, have been sliding on the market's conviction that the Fed is pivoting to rate cuts soon. The 30-year fixed rate has tumbled to 7.03% from 8% in October.
Some people have been cashing in on the downtrend. In fact, median home sales prices as of last week are clocking in at $364,535, Redfin data shows. That's down from $414,000 in October.
But those trying to time the housing market may see their plans backfire.
"The minute actual interest rates come down just one more point, everybody's going to jump into the market, and you're going to be paying a lot more for your house," Corcoran said.
Her advice echoed her previous warnings about home prices back in August when she said, "All hell's going to break loose" once the Fed cuts rates and mortgages get cheaper.
"If you have any way of getting cash together and getting into the market and buying a house and getting out of a rental, which is tempting to keep because it's a little cheaper, don't do it," she said. "Buy yourself a house."
Similarly, a Bank of America executive told Business Insider recently that trying to time the housing market by waiting for lower rates wasn't a good idea.
"It's really when you're financially ready, emotionally ready, and, ultimately, you find that home that fits your dreams and/or your needs," said Matt Vernon, the bank's head of consumer lending.