The US housing market continues to face challenges despite minor improvements in mortgage rates, says Barbara Corcoran, a well-known real estate entrepreneur and investor on the hit show Shark Tank. Corcoran, who founded the Corcoran Group, cautions that the market’s current stagnation will persist for the foreseeable future, particularly for homebuyers and sellers.
Mortgage rates may have dropped slightly, but Corcoran asserts that they are still too high to revive the market in a meaningful way. With fewer homes for sale and a significant number of buyers priced out of the market, the industry is caught in a cycle of uncertainty.
Mortgage rates drop, but not enough to stimulate the market
Mortgage rates have seen a modest decline, falling to 6.96% for a 30-year fixed-rate mortgage—the lowest level in six weeks. However, Corcoran believes this minor reduction is not significant enough to alter the market dynamics. She explained that although the drop from 7% to 6.9% is psychologically notable, it does not provide the substantial relief buyers and sellers had hoped for.
The ongoing affordability crisis remains a significant issue. Many prospective buyers are still being priced out of the market, and with fewer homes on the market, there is little opportunity for movement.
This situation is exacerbated by high interest rates, which are keeping sellers from listing their properties. According to Corcoran, homeowners who locked in low interest rates in recent years are reluctant to sell their homes, further limiting inventory.
Moreover, homes that are listed tend to stay on the market for longer periods. A report from Redfin indicated that 54.5% of homes had been on the market for more than 60 days in December 2024, as potential buyers found these properties too expensive.
The luxury housing market shows resilience
While the broader market remains stagnant, there is a glimmer of optimism in the luxury housing sector. Corcoran noted that luxury homes, particularly in warmer climates, are selling at twice the rate of the national average. Despite the high interest rates, wealthy buyers appear less affected by the affordability constraints, making deals more common in this segment.
Corcoran has expressed a positive outlook for the luxury market, pointing to strong demand and a more resilient buyer pool. “I’m very bullish on that” she said, particularly highlighting the performance in regions with attractive climates, where luxury sales continue to show impressive numbers.
While the overall housing market continues to struggle under the weight of high mortgage rates and limited inventory, the luxury segment offers some hope for a quicker recovery.
