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Since the advent of the 30-year mortgage, purchasing real estate has been one of the most reliable paths Americans can take to the middle class. Several generations of Americans have used their home equity to fund their businesses, their children's education, and their retirement. That's why Shark Tank star and real estate mogul Barbara Corcoran is concerned that fewer than 25 percent of homes in America are sold to first-time buyers.
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Corcoran expressed her concerns during an appearance on Fox's Cavuto: Coast to Coast, where she spoke about the difficulties would-be homeowners face today. Most of these difficulties relate to cost. According to the Federal Reserve Bank of St. Louis, the average sale price of a home in the United States in the third quarter of 2024 is $501,000. It's expensive. However, million-dollar starter homes are common in major coastal real estate markets like Los Angeles, Seattle, and New York.
As high as that number is, Corcoran sees current interest rates as an even bigger barrier to buying a home. When host Neil Cavuto asked Corcoran for his thoughts on “the interest rate environment,” Corcoran responded by saying, “Well, I think what we're losing right now, (what ) what we desperately need is more first-time buyers, less over 24% of people buying now are first-time buyers, which is an all-time high.”
See also: This startup backed by Jeff Bezos will allow you to become a homeowner in just 10 minutes, with minimum investments as low as $100 for properties like the Byer House from Stranger Things.
She then addressed the issue of interest rates, telling Cavuto, “Rates have been bouncing around for a while between six and seven percent, so people are confused. They don't have high expectations. They no longer expect a huge rate. If that happens, my goodness, that would be great for the market, but in the last year alone we've sold 3 ½ percent more homes despite what's happening with interest rates.
However, Corcoran noted a worrying trend hidden behind this rosy metric when she told Cavuto, “But first-time buyers aren’t really part of it. [increase in sales volume].” A recent report from National Association of Realtors revealed that the average American homebuyer is now 56 years old. This means that today's first-time homebuyers are operating in a much less buyer-friendly market than their parents or grandparents were.
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