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Ever since the advent of the 30-year mortgage, buying real estate has been one of the most reliable routes Americans could take to the middle class. Multiple generations of Americans have used the equity in their homes to finance businesses, their children’s education and their retirement. That’s why Shark Tank star and real estate mogul Barbara Corcoran is concerned that less than 25% of homes in America are being sold to first-time buyers.
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Corcoran voiced her concerns during an appearance on Fox’s Cavuto: Coast to Coast, where she spoke about the difficulties prospective homeowners face today. Most of those difficulties revolve around cost. According to the St. Louis Federal Reserve, the average sale price for a home in the U.S. for Q3 2024 is $501,000. That’s expensive. However, $1,000,000 starter homes are common in major coastal real estate markets like Los Angeles, Seattle and New York City.
As high as that number is, Corcoran sees the current interest rates as an even bigger impediment to homebuying. When host Neil Cavuto asked Corcoran to give her thoughts on the “interest rate environment,” Corcoran responded by saying, “Well, I think what we’re losing right now, (what) we desperately need is more first-time buyers, less than 24% of people buying now are first-time buyers, which is an all-time low.”
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Then she addressed the interest rate question by telling Cavuto, “The rates have been bouncing around a while now between six and seven percent, so people are confused. They don’t have big expectations. They’re no longer waiting for a tremendous rate drop. If that happens, God, it would be great for the market, but in the last year alone we’ve sold 3 ½% more houses despite what’s going on with the interest rates.”
However, Corcoran noted an ominous trend hiding beneath that rosy metric when she told Cavuto, “But the first-time buyers aren’t much of a piece of that [increase in sales volume].” A recent report from the National Association of Realtors revealed that the average American homebuyer is now 56 years old. That means today’s first-time homebuyers operate in a much less buyer-friendly market than their parents or grandparents did.
