Don’t wait to buy a home! Shark Tank star Barbara Corcoran warns first-time buyers they are ‘dead wrong’ if they wait for interest rates to keep falling – as she predicts mortgages will NEVER return to record lows

Don’t wait to buy a home! Shark Tank star Barbara Corcoran warns first-time buyers they are ‘dead wrong’ if they wait for interest rates to keep falling – as she predicts mortgages will NEVER return to record lows

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Shark Tank star Barbara Corcoran has warned first-time buyers not to wait any longer to purchase a home – even as mortgage rates finally start to fall.

Rates on home loans have dropped below 7 percent for the first time since early August while one in four sellers are also slashing asking prices.

Buyers still face paying almost $1,000-a-month more on their mortgage than if they had bought two years ago – prompting some to wait for costs to come down further. But Corcoran insists this is the wrong approach. 

‘You’re better off buying something new when you can,’ she told CNBC.

‘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.’

Shark Tank star Barbara Corcoran has warned first-time buyers not to wait any longer to purchase a home as mortgage rates finally start to fall

Shark Tank star Barbara Corcoran has warned first-time buyers not to wait any longer to purchase a home as mortgage rates finally start to fall

She added: ‘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 was asked whether it makes more financial sense to buy than rent after analysis by intelligence firm CBRE found mortgage payments are now 52 percent higher than rents.

She said: ‘If you have any way of getting the cash together and getting into the market and buying a house and getting out of the rental – which is tempting to keep because it’s a little cheaper – don’t do it. Buy yourself a house.’

Figures from Government-backed lender Freddie Mac show the average rate on a 30-year fixed mortgage hit 6.95 percent last week – down from 7.03 percent the week prior. 

It marked the seventh consecutive week that home loans have dropped since late October when they reached 7.79 percent – their highest level since 2000. The last time rates were below 7 percent was on August 10 when they were hovering at 6.96 percent.

Asked if she believed mortgage rates had surpassed their peak, Corcoran said: ‘Most people believe that. None of us are fortune tellers but everyone’s expecting the price on mortgages will come down to 6 percent.

‘Maybe even a little lower than that, some conduits are saying. I don’t really know but what I do know is they will come down.’

At today’s rate, somebody purchasing a $400,000 home with a 5 percent downpayment faces shelling out $2,515 per month on a 30-year fixed mortgage.

But had they bought in December 2021 – when rates were hovering at around 3.10 percent – they would have paid just $1,623.

Mortgage costs have been pushed up by the Federal Reserve’s relentless campaign to interest rate hikes in a bid to tame inflation.

Their policy has taken borrowing costs from record lows of 0.5 percent in April 2020 to their current 22-year high of between 5.25 and 5.5 percent.

Mortgage rates are not directly dictated by the Fed’s actions but instead track the pattern of 10-year Treasury Yields. These are determined by a range of factors including inflation, economic growth and the Fed’s benchmark funds rate.

Mortgage rates have fallen below 7 percent for the first time since early August in a welcome boost for homebuyers, figures from Freddie Mac show

Mortgage rates have fallen below 7 percent for the first time since early August in a welcome boost for homebuyers, figures from Freddie Mac show

Elevated interest rates and soaring house prices mean buyers are facing one of the least affordable markets in recent memory

Elevated interest rates and soaring house prices mean buyers are facing one of the least affordable markets in recent memory 

A recent report by property portal Realtor.com predicts mortgage rates will fall to 6.5 percent next year

A recent report by property portal Realtor.com predicts mortgage rates will fall to 6.5 percent next year

But while Corcoran agreed home loans would continue to drop in price, she said they would never come down to the historic lows seen in the last few years. 

She said: ‘If you’re one of the people thinking gosh is that train going to come in for me? It’s never going to come again. Interest rates are never going to come down that low to 2 or 3 or 4, maybe even 5 percent.’

She added that she had studied the average US mortgage rate for the last 50 years and found it hovered at around 8 percent.

‘People relatively are seeing our current interest rates as a lot of money. They’re really not, they’re simply average,’ Corcoran said.

Soaring mortgage rates were expected to pour cold water on America’s red-hot housing market. However prices have remained robust thanks to a shortage of available properties. 

Yet recent data suggests some hope on the horizon for buyers. A report by property portal Zillow found almost one in four properties on the market in November had undergone a price cut since first being listed. 

Researchers noted the number was ‘abnormally high’ for the time of year.  

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