Kevin O’Leary Says Low Mortgage Rates Are ‘Never Coming Back’ Again – Here’s Why
Investor Kevin O’Leary says that the 3 or 4% mortgage rates of the past are most likely a thing of the past due to fiscal constraints on the US economy.
In a new discussion on Fox Business, O’Leary says mortgage rates are more linked to Treasuries than interest rates, and won’t be coming down until tariff-driven inflation comes down.
The Shark Tank star also notes that the inflated price of building supplies is restricting the construction of new homes, putting pressure on the supply side of the housing market.
Says O’Leary,
“Here’s the problem. The Fed may not be able to fix mortgage rates. They’re more priced on five and ten year treasuries. And they didn’t budge on the 25 basis point cut, because there are other reasons. One of them is [a] deficit. Others are looking at inflation and are worried about the print on Friday. The other problem is… the input costs on copper and aluminum and nickel and softwood lumber are all in the 35% tariff right now. So if you talk to a builder, any of the big ones are saying ‘wait a second, I can’t get permits, the stuff we make houses with is inflated like hell right now until you work out what the real tariffs are going to be are on the country that supplies it.’
That’s policy, and the Fed says ‘Great, we’ll cut another 25 basis points,’ I don’t think the five-year budges. The idea of a 4% mortgage rate, or 3.5% – it’s never coming back, ever. Ever. Remember, America ran on 7% mortgages for 50 years. That’s never coming back, and it doesn’t matter how much the President jawbones it…”
According to data from Freddie Mac, 30-year fixed-rate mortgages (FRM) are 6.26%, while 15-year FRM rates are at 5.41%.
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The post Kevin O’Leary Says Low Mortgage Rates Are ‘Never Coming Back’ Again – Here’s Why appeared first on The Daily Hodl.
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