Homebuyers hoping for a significant dip in housing prices might be out of luck, according to Kevin O’Leary, investor on ABC’s “Shark Tank.” O’Leary predicts that high mortgage rates, coupled with ongoing migration patterns sparked by the pandemic, will keep home prices buoyant.
In a recent interview, O’Leary pointed to the Federal Reserve’s interest rate hikes as a key factor. These hikes, designed to combat inflation, have pushed mortgage rates up from historic lows. While some anticipated rate cuts, O’Leary believes inflation will keep rates high.
“It’s hard to see that changing at all,” O’Leary said regarding potential rate cuts.
The pandemic also significantly impacted housing markets. With more people working remotely, there was a surge in demand for homes outside of major cities. This trend, according to O’Leary, has pushed prices upward in unexpected areas.
“The weird outcome of the pandemic” caused “the prices of those houses in rural regions went way through the roof,” O’Leary explained.
O’Leary’s comments echo his previous warnings about a “downsized America” due to rising costs. While acknowledging real estate’s historical value as an investment, he emphasizes careful consideration before taking on mortgage debt, particularly in the current climate.
