"House prices are not going to come down" — When Shark Tank's Barbara Corcoran discussed why home affordability had remained an issue

During an interview on Good Morning America on August 24, 2023, Barbara Corcoran, a real estate expert and investor on Shark Tank, responded to a question from a viewer, Terry on Facebook. The viewer asked whether houses would become more affordable in the future, expressing concerns about the difficulty of finding homes at reasonable prices. In response, Corcoran stated,

"I can tell you this, house prices are not going to come down."

She explained that even if mortgage rates decline, demand will likely surge, leading to further price increases. Housing affordability has remained a challenge due to multiple factors affecting the market.

---

Shark Tank Barbara Corcoran explained why home prices are unlikely to decrease

Mortgage rates and their impact on home prices

Corcoran explained that the federal government uses interest rate adjustments as a tool to control inflation. The Shark Tank investor noted,

"It's the only tool the federal government has for controlling inflation and getting hold of our economy."

She added that the policy had already lowered inflation from 9% to 3% in the last year, and officials would probably continue their strategy until inflation hit their target level. Increased mortgage rates have affected the housing market but have not caused home prices to decline.

Corcoran pointed out that "the housing market is surprisingly strong" despite elevated borrowing costs. She highlighted that properties continue to sell quickly, with one-third selling above the asking price. Limited inventory remains a key factor preventing prices from falling. Corcoran stated,

"There are just not enough houses to go around."

---

Supply shortages and buyer demand

When addressing whether home prices would become more affordable in the future, Barbara Corcoran noted the persistent shortage of available properties.

"There's not a lot out there, and everybody is having a hard time," the Shark Tank investor stated.

She explained that once mortgage rates decline to 4% or 5%, more buyers will enter the market, pushing prices upward. Corcoran suggested that if rates drop, "all the buyers on the sideline are going to jump into the market," creating a new wave of demand.

She estimated home prices could increase by "as much as 10 or 15%" under these conditions. These insights indicate that affordability concerns are likely to persist, as supply constraints continue to influence pricing trends.

---

Considerations for buyers and sellers

Corcoran advised prospective buyers to adjust their expectations and explore different financing options. She acknowledged the difficulty of purchasing a home at current prices, saying,

"You have to adjust your horizon, you have to adjust what you're looking for."

She also suggested shopping for mortgage rate discounts, explaining that "if you go to your main bank, they will usually give you... one quarter percent off." For those considering an adjustable-rate mortgage (ARM), Corcoran supported the option, stating,

"Of course it is, because right now adjustable rates are high, and they'll adjust down when the rates go down."

The Shark Tank investor showed that an adjustable-rate mortgage would be a savvy choice for customers who anticipate the interest rates decreasing in the coming future. For sellers, Corcoran justified that the demand in the property market is robust, with homes selling rapidly, even within 20 days.

However, she recommended that sellers with options wait until next year when lower mortgage rates may attract more buyers, which could drive home prices higher.

---

Watch Shark Tank on ABC every Friday at 8 PM ET, and stream episodes anytime on Hulu.