- Home prices will soar the moment mortgage rates drop to 6%, Barbara Cocoran predicted.
- The "Shark Tank" investor is anticipating a wave of buyers coming to market once rates fall one percentage point.
- Buyers waiting for rates to come down may wind up paying more in the end, she warned.
Mortgage rates are edging closer to a "magic" number that will cause buyers to rush back to the market and send home prices soaring, according to real estate mogul Barbara Corcoran.
Speaking to Fox Business Network on Wednesday, the "Shark Tank" star and Corcoran Group founder warned of a coming surge in home prices once mortgage rates edge closer to 6%.
Borrowing costs falling to that level could drive prices up 8%-10%, she predicted, as there are hoards of prospective buyers who are waiting for rates to come down before entering the market.
"If rates go down just another percentage point — that's what I'm hoping for by year-end — prices are going to go through the roof," Cocoran said. "Everyone's going to charge the market. And so if you wait for interest rates to come down another point, I don't think you'll gain, I think you'll wind up paying more."
High mortgage rates have weighed on housing demand for the past few years, with home sales logging their worst year since 1995 last year.
The median US home cost $408,806 at the end of 2023, Redfin data shows. Home borrowing costs, meanwhile, remain elevated, with the 30-year fixed-mortgage rate clocking in at 6.79% the last week, according to Freddie Mac.
Real estate economists say that mortgage rates aren't primed for a significant drop anytime soon. Mortgage rates are influenced by real interest rates in the economy, and the Fed has hinted it could keep rates higher for longer as it continues to monitor inflation.
Corcoran, meanwhile, has urged her followers to get into the housing market now if they can. Historically, mortgage rates aren't that high, she said in an interview last year, adding that those who owned an existing home should buy a second home if they can.