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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."

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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.

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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.

"The way you adjust to mortgage rates doesn't mean you don't want a home," O'Leary said. "The way you adjust is you buy a smaller house."

It's a practical shift, not an easy one. Not everyone wants to trade space or expectations just to make the math work. Some will wait. Some will stretch. Some will sit it out.

With mortgage rates unlikely to fall below 5%, investors may need to rethink how they allocate capital. Platforms like Public allow users to explore stocks, ETFs, and crypto all in one place — helping them stay diversified and make data-informed choices even in a higher-rate environment.

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Underneath the headline line is a guardrail he treats like a hard limit.

"If you're using more than a third of your free cash flow after tax to pay your mortgage, you're gonna run into financial problems," he said in the reel.

That math doesn't change just because rates did. If anything, it matters more now.

And that's where things stand. Mortgage rates remain well above the levels many buyers got used to, while home prices haven't exactly dropped to match. Waiting for a better setup feels logical. Nobody wants to feel like they're overpaying.

But O'Leary's message cuts against that instinct. If rates don't fall below 5% anytime soon, the move isn't waiting for the perfect moment. It's deciding whether the numbers work now.

The takeaway from that backyard reel is simple. Stop waiting for the Federal Reserve to save your guest room. In O'Leary's world, the American dream isn't gone. It's just 30% more crowded.

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This article Kevin O'Leary Says No, Interest Rates Won't Ever Go Below 5% Again — But All That It Means Is… 'You're Gonna Buy A House 30% Smaller. That's All' originally appeared on Benzinga.com

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