Barbara Corcoran: This Is the ‘Real Problem’ With the Housing Market Right Now
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
The U.S. housing market has been sluggish for some time now, and according to real estate mogul Barbara Corcoran, it’s not just high mortgage rates or high home prices keeping it this way; it’s uncertainty.
While many analysts have suggested that the ongoing housing gridlock is the result of high interest rates and limited inventory, Corcoran said the real issue is psychological. “There’s great uncertainty, and that’s bad for business,” Corcoran said in a recent interview with The Street. “Uncertainty makes people pause, which is a problem.”
Economics and human behavior go hand in hand, and they’re holding the housing market hostage now.
The Missing Ingredient
Over the past few years, homebuyers have faced a host of conditions working against them: home prices that soared during the pandemic, mortgage rates that doubled when inflation spiked in 2022, and now a confusing economy driven by high tariffs. Even though the Federal Reserve began cutting rates in 2024, inflation and political tensions are keeping people uncertain.
That ambiguity affects more than just buyers. Corcoran pointed out that even the builders and suppliers that comprise the housing ecosystem are playing into the uncertainty. “The suppliers of homes in America, with seven million homes short, are now hoarding lumber because they’re afraid of the tariffs,” she said.
The Mortgage Rate Trap
Another part of the problem is that many existing homeowners are financially “locked in” to their properties. More than two-thirds of Americans currently have mortgage rates around 4% or lower. With today’s average rates hovering in the high 6% arena, those homeowners have little incentive to sell. “Why would you sell your house? Why would you move? You have a 4% rate. That’s really the blanket holding,” Corcoran explained.
This inertia on the seller side means fewer homes on the market, thus higher prices, which further discourages buyers, especially first-timers. Even though home prices are slowing, Corcoran said that slow down is not enough to motivate people to buy.
“A lot of people are excited about the housing prices slowing down, but it’s less than a quarter percent, and that doesn’t provide a lot of relief for people,” she said.
What Can Break the Cycle?
While some experts hope that lower mortgage rates will eventually stimulate housing market activity, Corcoran fears rate cuts alone won’t solve the issue if broader uncertainty continues to impede consumer confidence. While the threat of a potential recession could lower rates, it also creates more hesitation among buyers worried about their job security and financial futures.
In Corcoran’s view, restoring stability, not just reducing rates, may be the key to freeing up the housing market again.
“Uncertain people don’t move forward,” she said. Right now, too many people are standing still.
More From GOBankingRates
Sources
