There’s a reason so many Americans are hesitant to buy a home right now. For starters, homes are less affordable than they’ve been in the past.
In March, the median existing-home sales price rose to $403,700, representing an all-time high for the month of March and the 21st consecutive month of annual price increases, according to the National Association of Realtors (NAR).
And, with the average 30-year mortgage rate sitting at 6.76% as of writing, per Freddie Mac, that’s a tough combination.
It’s not surprising, then, that only 22% of consumers say it’s a good time to buy a home, according to Fannie Mae’s most recent Home Purchase Sentiment Index. An overwhelming 77% think it’s a bad time to buy.
But if you were to ask Shark Tank personality and real estate investor Barbara Corcoran what she thinks of the U.S. housing market, she might put things in a more positive light.
“We have so much hesitation in the market, and it’s giving us an opportunity for buyers to make a good deal,” Corcoran recently told Fox Business.
Ever since the Trump administration introduced tariff policies in early April, the stock market has been volatile — and Corcoran acknowledged that the real estate market may be similarly vulnerable to upheaval, especially since she’s seeing large companies back away from long-term commercial leases.
However, she insists that home buyers can benefit from this broad economic uncertainty.
“People don’t like to buy in uncertain times. People worry,” she told Fox.
“People at home are worried about their futures and nervous about everything, and the last thing they do is want to make a large commitment to anything.”
That, however, could work to buyers’ advantage.
A big reason U.S. home prices have been elevated is that the housing market has lacked inventory. In March, there was a four-month supply of homes on the market, per the NAR. But it commonly takes a five- to six-month supply of homes to create a balanced market — one where there’s enough supply to generally meet buyer demand.
However, if a large percentage of buyers start to back away from home purchases because they’re worried about an economic downturn, it could create an opportunity for remaining buyers who aren’t skittish.
Corcoran also told Fox that people who are moving money out of the stock market should consider putting it into real estate sooner rather than later.
“It’s a much more stable environment, of course, because I love real estate, but I’m doing it myself. I have taken so much money out of the stock market. I’ve gotten great deals this month,” she said.
“The deals that turned me away four months ago are coming back to me. So, I know it’s a good time to buy.”
Read more: Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
If you’re looking to buy a home, you may want to take the opportunity at a time when other buyers may be backing away. But it’s important to go about things strategically, especially given that home prices and mortgage rates are up, and that economic uncertainty still abounds.
One thing you may want to do is get preapproved for a mortgage. This is a good strategy in general during periods when housing inventory is on the low side. Preapproval tells sellers that you’re a serious buyer whose finances have already been reviewed by a lender.
But just as important, mortgage preapproval gives you a sense of how much you’re able to borrow. And at a time when the U.S. economy isn’t so stable, it’s important to not get in over your head.
It’s generally a good idea to keep your housing costs to 30% of your income or less. There’s debate as to whether that 30% threshold should apply to your gross income versus your net income. But either way, it’s important to run the numbers to establish a safe home-buying budget. And seeing what loan amount you get preapproved for should help.
It’s also important to make sure you’re not overpaying for a home at a time when prices are up — especially if you aren’t going to be making a very substantial down payment. If the economy enters a recession in the coming year, it could trickle down to the housing market and send home values on a downward spiral.
If you overpay for a home and also put little money down at closing, you risk ending up underwater on your mortgage if home values plunge. This means that if you were to, say, lose your job as a result of a recession and find yourself needing to sell, you’d risk not being able to pay off your lender with your sale proceeds.
Make sure to get yourself an experienced real estate agent who knows the local market well and who can help you determine whether you’re paying up for a home. And be careful with loan programs like VA (Veterans Affairs) loans that allow you to make a 0% down payment, because starting out with no equity could be a dangerous thing at a time when economic conditions are uncertain.
And, make sure you’re buying a home you can see yourself living in for the long haul. If property values do start to decline, it’s going to be harder to sell. So you may want to focus on a home that’s likely to serve your needs for the next five to 10 years.
If you have children, prioritize things like access to good schools. If you’re trying to build up your career, prioritize access to a healthy job market.
Finally, be very careful if you’re going to buy a fixer-upper. Yes, you may get a discount on the purchase price of the home, but you’ll also be reliant on supplies to get that home into livable condition — and tariffs could drive your costs upward. Higher supply costs could throw your renovation budget way off course, so you may want to favor a home that doesn’t need as much work.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
