2 hours ago
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
Imagine getting a hard mortgage reality check from a man pacing under trees in pink plaid pajama pants and flip-flops, phone on speaker, mid-call.
In an August Instagram reel, O'Shares Investments chair and "Shark Tank" investor Kevin O'Leary was asked the question buyers keep coming back to. Do you think interest rates will ever go below 5% again?
"No. No, I don't."
"I think it's gonna take a very, very, very, very long time, if ever," O'Leary said in the reel. "I think the days of free money are over."
Don't Miss:
-
The AI Marketing Platform Backed by Insiders from Google, Meta, and Amazon — Invest at $0.91/Share
-
Own a Piece of the First-Ever Atari Hotel — Starting at $500
The rate reality buyers keep resisting
O'Leary's argument isn't about short-term swings. It's about resetting expectations that got shaped during an unusual window.
He said he doesn't see rates getting cut in any meaningful way, pointing to what he views as a strong U.S. economy and rising productivity.
"I just don't see interest rates in the U.S., world's strongest economy, being dropped dramatically," O'Leary said.
Then he zoomed out. For decades, mortgage rates hovered around 7% and that was considered normal. At various points, they climbed even higher, with double-digit rates showing up in earlier cycles.
"You gotta remember, for 40 years, 7% was a market mortgage," O'Leary said. "It's not uncommon. It's not crazy."
"That aberration of 3.5%, 3.75% mortgages, that's an aberration," O'Leary said in the reel. "You were very fortunate to buy a home and get a long-duration mortgage during that period."
In other words, that window wasn't something to expect again. It was something you got lucky to catch.
Trending: Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum.
The adjustment nobody loves
While most of the housing conversation leans on waiting, cooling, or hoping for relief, O'Leary keeps it simple. People aren't going to stop buying homes. They're just going to change what they buy.
"All that it means, though, is you're gonna buy a house 30% smaller. That's all," he said.
