The Housing Market Will 'Go Ballistic' If Interest Rates Ever Hit This Number, According To Barbara Corcoran

The Federal Reserve cut interest rates in September as part of a continued battle against rising inflation and ballooning mortgage rates. 30-year mortgage rates themselves fell to the low 6% range, after reaching a generational high of nearly 7% in January, according to a Bankrate report. The cuts are part of a continued trend that has given many economists a favorable view of the housing market heading into the final quarter of 2025. This view is shared by real estate mogul Barbara Corcoran, who recently went on a podcast to share her views on the market.

During a Fox Business interview, Corcoran said that "anything with a 5% in front of it is going to make this market go ballistic," as currently hesitant buyers would pounce on homes. While many people make claims about the market, Corcoran's opinion may hold more weight. The 76-year-old real estate tycoon has made a name for herself as a savvy buyer and a prominent voice in the popular TV show "Shark Tank." Notably, she also gained traction for growing her company, The Corcoran Group, from a $1,000 loan to a billion-dollar business. The reason for this 5% inflection point is due to multiple factors, and the forecast for reaching that point is bleak.

Home ownership in the United States has been dropping steadily since the end of the COVID-19 pandemic, in part due to rising property taxes, which have begun to price members of the baby boomer generation out of already financed homes. Members of this generation are also struggling to sell their homes, as fixed mortgage rates have continued to stay high and taxes have increased. This has caused many prospective home owners, along with first-time buyers, to keep an eye on the market, waiting for rates to drop rather than buy.

A major factor in this limbo is that the number of homes sold has stagnated, even with more homes being built; this creates a market where there are too many sellers and not enough buyers. Surprisingly, even with this imbalance seemingly favoring buyers, both home prices and mortgage rates have ballooned. Corcoran believes, if rates were to come down to 5%, this dynamic would burst, prompting buyers to jump on rates. Additionally, the percentage of first-time home buyers has shrunk to only 21% of the market, according to the National Association of Realtors. Lower rates would help increase access for first-time buyers who often rely on loans. 

Sadly, there are very few projections in which a 5% fixed mortgage rate is expected in the next five years, according to economists. Even with mortgage rates at yearly lows, experts still see the 5% mark as a far-off target, given the current economic and government landscape.