Story by Adam Palasciano printed in GoBankingRates.com

The post-pandemic housing market in the U.S. has ushered in sky-high mortgage rates and a massive spike in home prices not seen in years. Many current homeowners aren’t willing to sell their homes, exacerbating the lack of housing supply and driving up prices further. Meanwhile, buyer demand has skyrocketed, creating one of the most expensive housing markets in history.
However, despite high mortgage rates, real estate mogul Barbara Corcoran explained that if you wait for interest rates to drop, you just might spend more on a home anyway, as reported by Forbes.

Home Prices Could Rise When Interest Rates Drop

According to the Federal Reserve Bank of St. Louis, average mortgage interest rates for a 30-year fixed rate mortgage in the US hover around 7.09% as of May 9, 2024. With mortgage rates still stubbornly high, Corcoran said that a drop in rates could send home prices even higher.
“I can’t explain the rates going up or down — that’s not my bailiwick. But what I can explain is if rates go down, just another percentage point, that’s what I’m hoping for, prices are going to go through the roof,” Corcoran explained to Fox Business.

A drop in interest rates to 6% could have a major impact on the price of homes nationwide.
“Everybody is going to charge the market, and so if you wait for interest rates to come down by another point, I don’t think you’ll gain,” she said. “I think you’ll wind up paying more, because I wouldn’t be surprised if real estate went up by another 8% or 10% if interest rates come down another point.”

Buying a home is one of the biggest financial decisions you can make. It’s important to be financially prepared before you decide to do so. Here are a few questions to ask yourself first:

• Do I have at least 6-9 months’ worth of cash savings for monthly expenses in the event of an emergency?
• Can I afford a mortgage without spending more than 30% of my monthly income?
• Am I prepared to spend money on future home repairs and maintenance?
• If you’ve answered yes to all of these questions and you have the cash for a down payment now, then it might be time to pull the trigger before homes become even more expensive.