Kevin O'leary Issues Warning Over US Real Estate - Claims He's Spotted A 'Crushing Indicator' For Housing. Here's The Big Red Flag And What To Do Next

2025-09-20 02:03:11

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Shopping for a home in America is already tough and according to“Shark Tank” star Kevin O'Leary, it won't be getting easier anytime soon.

In a recent op-ed for the Daily Mail, O'Leary said he spotted a“crushing indicator for the U.S. housing market.” In his words, it's“crushing news” for America's homebuyers.

The breaking point? Inflation data.

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O'Leary pointed out that the U.S. consumer price index (CPI)“rose at a faster pace than anticipated.” Core CPI - which strips out food and energy - climbed 3.1% year over year, while the producer price index jumped 0.9% month over month.

He argued this reinforces something he has long warned about: the cost of Trump's sweeping tariffs will eventually be passed on to consumers.

Inflation can affect real estate indirectly - through central bank policy. O'Leary explained that higher prices make it less likely Federal Reserve Chairman Jerome Powell will cut interest rates at the Fed's September meeting – which proved to be a correct prediction.

“In fact, I'm betting there won't be a rate cut at all in 2025. And that will keep the U.S. housing market in its current state of stagnation,” he wrote.

'The cold hard truth' - how to survive the fallout

Elevated rates don't just make mortgages more expensive - they also choke supply.

“Right now, the average rate on the 30-year fixed mortgage is 6.58 percent, which makes it difficult for many existing homeowners, who locked in previously low rates (as low as 3 to 4 percent), to sell their homes and take on a new, higher mortgage,” O'Leary explained.

“As a result, they're demanding high sales prices - and buyers are feeling hopeless, facing exorbitant listings and high-interest mortgages.”

And the situation won't change soon.“Here's the cold hard truth - the days of free money and low mortgage rates are over!” O'Leary wrote.

Why? He argued that America's economy is“firing on all cylinders,” with Trump's industrial policy forcing more companies to invest in the country. While that's good for growth, it won't ease inflation - or mortgage rates.

Given this tough backdrop, O'Leary has a simple piece of advice for would-be buyers:“Accept that you'll have to buy a smaller house, likely 30 percent smaller.”

But size aside, he says the key is financial discipline:

“Do not - under any circumstances - buy a home that eats up more than 33 percent of your cash flow when factoring in insurance, taxes and mortgage payments.”

Read more: Here are 5 'must have' items that Americans (almost) always overpay for - and very quickly regret. How many are hurting you?

Getting on the housing ladder

The housing market is daunting. A recent Bankrate study found that to afford a typical home in the U.S., a household would now need an annual income exceeding $116,000.

Yet, real estate remains a popular path to building wealth.

For one, it's a classic hedge against inflation. As inflation rises, home values tend to increase as well, reflecting higher costs for materials, labor and land. Rental income often follows suit, providing landlords with a stream of income that adjusts with inflation.

Second, while real estate moves in cycles, it doesn't require a booming market to deliver returns. Even in a downturn, high-quality, essential properties can continue to generate passive income through rent. In other words, the asset can work for you - regardless of broader market conditions.

The best part? You don't need to buy a property outright to invest in real estate.

Become a real estate mogul - starting with $250

Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties , which gives investors monthly rental income, real-time appreciation and tax benefits - without the need for a hefty down payment or 3 A.M. tenant calls.

Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide , guided by proprietary underwriting and market analytics typically used by large institutions.

Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually.

Every investment is secured by real assets , not dependent on the platform's viability. Each property is held in a standalone Propco LLC, so investors own the property - not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.

Getting started is a quick and easy process. With a minimum investment of $250, you can sign up for an account and then browse available properties . Once you verify your information with their team, you can invest in the properties of your choice in as little as 30 seconds.

Tap into the multi-trillion-dollar home equity market

Americans have built substantial wealth through homeownership, but the $35 trillion U.S. home equity market has historically been the exclusive playground of large institutions.

Homeshares is changing the game by allowing accredited investors to gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund - without the headaches of buying, owning, or managing property.

With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.

Be the landlord of Walmart

If you've ever been a landlord, you know how important it is to have reliable tenants.

How do grocery stores sound?

That's where First National Realty Partners (FNRP) comes in. The platform allows accredited investors to diversify their portfolio through grocery-anchored commercial properties without taking on the responsibilities of being a landlord.

With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart , which provide essential goods to their communities. Thanks to Triple Net (NNN) leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.

Simply answer a few questions - including how much you would like to invest - to start browsing their full list of available properties .